Another week, another extension of a historic overbought period in the S&P 500.
Based on the closing performance of the stock market’s major indices, you probably would not guess that one of the stock market’s largest companies (Cisco) lost 16% on the day. If there was a day for the market to have an excuse to sell-off sharply, today was one of those days. However, the market fell far short of the big volume, big decline day that I keep awaiting before I get firmly bearish on the market’s stubborn overbought conditions.
My favorite oversold/overbought indicator did not even fall below its overbought threshold. T2108, the percentage of stocks below their respective 40-day moving averages (DMAs), continues to float above the 70% overbought threshold. The string of 46 straight days in overbought territory is the sixth longest streak since 1986.
*Chart created using TeleChart:
Be careful out there!
Full disclosure: long SSO puts