Micro-Bubbles Slicing Through Overbought Trading Signals – Above the 40 (January 22, 2021)

Stock Market Commentary The stock market gapped up and never looked back in the wake of the Presidential Inauguration. Subsequently, buyers produced mixed follow-through for two days. Big cap tech defied the narrative of a rotation into value and industrial names by delivering the most convincing follow-through. A third drop from overbought conditions in a … Read more

Stocks Hold A Tenuous Grip On Overbought Trading Conditions – Above the 40 (January 15, 2021)

Stock Market Commentary A liquidity-driven bounce off support took a small breather last week. The major stock market indices ended the week with a small loss. On the way there, overbought trading conditions ended for a day. As the major indices languished, the stock market dipped in and out of overbought conditions on an intraday … Read more

Overbought Period Demonstrates Freshly Bullish Sentiment for Stocks – Above the 40 (January 8, 2021)

Stock Market Commentary What a week to start the year’s trading. It started with a definitively bearish end to extended overbought conditions. Overbought conditions bullishly resumed in the middle of the week despite an insurrection in Washington D.C. The week ended with a confirmation of the freshly bullish sentiment in the market. The trading action … Read more

Weakening Overbought Conditions Greet the New Year – Above the 40 (December 31, 2020)

Stock Market Commentary The extended overbought period still looks tenuous. For the second trading day in a row, AT40 (T2108), the percentage of stocks trading above their respective 40-day moving averages (DMAs), broke down below the overbought threshold of 70% before closing at 73.0%. The major indices do not reveal these weakening overbought conditions. The … Read more

An Extended Overbought Rally Moves Into Historic Territory (Above the 40) – December 18, 2020

Stock Market Commentary The Federal Reserve signaled an incremental improvement in its economic outlook by making an allowance for limited stock repurchases and dividends by the country’s top financial institutions. As a result, bank stocks apparently soared in after hours trading. That fresh rally in financials should extend to a positive open on Monday and … Read more

Key Overbought Threshold for the Stock Market In Time for the Holidays – Above the 40 (December 11, 2020)

Stock Market Commentary A week ago, the stock market stretched into an extended overbought rally. The stock market proceeded to relax from that stretch. Yet, the breadth indicators barely budged and allowed the overbought rally to reach a key overbought threshold and test of the extended overbought rally. The overbought period reached 20 days in … Read more

A Gathering Storm of Confirmed 50DMA Breakdowns Fail to Trigger Oversold Signal – Above the 40 (October 30, 2020)

Stock Market Statistics AT40 = 26.5% of stocks are trading above their respective 40-day moving averages (DMAs) AT200 = 44.5% of stocks are trading above their respective 200DMAs (8-month high) VIX = 38.0 Short-term Trading Call: cautiously bullish Stock Market Commentary A little over a week ago, the stock market looked poised to launch higher … Read more

Stock Market Rebounds Stronger Than Before – Above the 40 (October 9, 2020)

Stock Market Statistics AT40 = 61.1% of stocks are trading above their respective 40-day moving averages (DMAs) AT200 = 53.2% of stocks are trading above their respective 200DMAs VIX = 25.0 Short-term Trading Call: cautiously bullish Stock Market Commentary Without recognizing the bullish divergence that ended the previous week, last week’s trading dynamic of a … Read more

A Bullish Divergence for Stocks Even As President Falls to the Coronavirus – Above the 40 (October 2, 2020)

Stock Market Statistics AT40 = 41.8% of stocks are trading above their respective 40-day moving averages (DMAs) (ranged from 25.8% to 42.8%) AT200 = 42.6% of stocks are trading above their respective 200DMAs (ranged from 39.2% to 45.5%) VIX = 27.6 Short-term Trading Call: cautiously bullish Stock Market Commentary Last Friday was the kind of … Read more

A Tech Stock Breakdown While Rest of Market Yawns – Above the 40 (September 18, 2020)

Stock Market Statistics AT40 = 43.5% of stocks are trading above their respective 40-day moving averages (DMAs)AT200 = 44.9% of stocks are trading above their respective 200DMAsVIX = 25.8Short-term Trading Call: cautiously bearish Stock Market Commentary Tech stocks led the way up, and now they are leading the way down. The top 1% of the … Read more