Market may be overbought....BUT

Market is overbought on couple of Indicators I follow which is listed below :

RSI........

Nasdaq              76.97

S&P 500           75.73

IWM                 73.76

SOX                 73.01

DOW               68.99

RSI is telling us all of the above are overbought except DOW.

CMF.....

IWM              0.068........high 0.17

DOW             0.015........high 0.43

S&P 500        0.187........high 0.45

Nasdaq           0.241.......high 0.41

As you can clearly see Chaikin Money Flow has slowed down, this means money is leaving this TAPE.

These are the only 2 indicators I watch daily and report in my BLOG daily, they do give advance warning on trend...

SO what all this means......?

It means that some money is going to sidelines, either booking profit or waiting for a better entry in this market.....this has happened @ an alarming rate in most sector of this market thus take it for whatever its worth.

RSI is a little tricky, In a strong market, RSI can go to 90 area.....

Are we in a strong market? answer is absolutely YES.....

It is better to play rotation than risk good profit, means profit needs to be booked.

Many stocks have not participated in this rally, majority of Chinese stocks are in deep slump.

Some famous names like XLNX, M have not done much @ all.....

SO...look @ your portfolio evaluate technical strength, some are getting dangerously overbought for near term factoring recent surge NOT necessarily RSI numbers......

Nobody knows how far market or stocks can go.......BUT.....booking profit Is a smart strategy....

Good luck with your own analysis, comfort level and risk taking ability.

BLOG does NOT give buy or sell.

Saleem

Posted in: Mixed