{"id":74698,"date":"2025-06-15T15:13:47","date_gmt":"2025-06-15T22:13:47","guid":{"rendered":"https:\/\/drduru.com\/onetwentytwo\/?p=74698"},"modified":"2025-06-15T15:13:48","modified_gmt":"2025-06-15T22:13:48","slug":"overbought-conditions-end-with-fresh-market-risk-the-market-breadth","status":"publish","type":"post","link":"https:\/\/drduru.com\/onetwentytwo\/2025\/06\/15\/overbought-conditions-end-with-fresh-market-risk-the-market-breadth\/","title":{"rendered":"Overbought Conditions End with Fresh Market Risk &#8211; The Market Breadth"},"content":{"rendered":"\n<h2 class=\"wp-block-heading\"><strong>Stock Market Commentary<\/strong><\/h2>\n\n\n\n<p><a href=\"https:\/\/drduru.com\/onetwentytwo\/2025\/06\/08\/from-fragile-to-fearless-the-markets-return-to-overbought-territory-the-market-breadth\/\">The stock market&#8217;s fearless streak<\/a> met fresh geopolitical headwinds that significantly raised the risk quotient. Tensions surged as <a href=\"https:\/\/www.npr.org\/2025\/06\/15\/nx-s1-5434172\/israel-iran-strikes\">Israel bombarded Iran&#8217;s nuclear infrastructure and Iran retaliated<\/a>, spiking oil prices and triggering a market sell-off that, while sharp, could have and should have been a lot worse. This fresh market risk is a reminder that complacency, especially when married with overbought trading conditions, can only last so long. However, the stock market as a whole remains well-supported, so I am not changing my bullish posture&#8230;even as I take some precautions. (A friend predicted that Iran&#8217;s repressive regime will fall soon. If he is correct, I fully expect a massive rally in the stock market in response).<\/p>\n\n\n\n<p>In parallel to rapidly developing news in domestic politics and geopolitical tensions, the market will contend with another Federal Reserve meeting and a trading week shortened by the Juneteenth holiday on Thursday.<\/p>\n\n\n\n<br><script async=\"\" src=\"https:\/\/pagead2.googlesyndication.com\/pagead\/js\/adsbygoogle.js\"><\/script>\n<ins class=\"adsbygoogle\" style=\"display:block; text-align:center;\" data-ad-layout=\"in-article\" data-ad-format=\"fluid\" data-ad-client=\"ca-pub-1196033822186410\" data-ad-slot=\"3478942445\"><\/ins>\n<script>\n     (adsbygoogle = window.adsbygoogle || []).push({});\n<\/script><br>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>The Stock Market Indices<\/strong><\/h2>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>S&amp;P 500 (SPY)<\/strong><\/h3>\n\n\n\n<p>The pullback for the S&amp;P 500 was mild, all things considered, at 1.1%. Key support lies near 5941 at the 20-day moving average (DMA) (dotted line) (soft pullback scenario), around 5800 at the 200DMA (blue line) (medium bad case), and approximately 5675 at the 50DMA (&#8220;worst&#8221; case for this bull market). If the S&amp;P 500 falls below its 50DMA, I will reassess market sentiment.<\/p>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"1510\" height=\"800\" src=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2023\/07\/061325-SP-500-SPY.png\" alt=\"The S&amp;P 500 (SPY) stopped short of testing its all-time high as it retreated towards its first post-election close on fresh market risks from an Israel-Iran war.\" class=\"wp-image-74680\" title=\"S&amp;P 500 (SPY)\" srcset=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2023\/07\/061325-SP-500-SPY.png 1510w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2023\/07\/061325-SP-500-SPY-768x407.png 768w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2023\/07\/061325-SP-500-SPY-1320x699.png 1320w\" sizes=\"auto, (max-width: 1510px) 100vw, 1510px\" \/><figcaption class=\"wp-element-caption\"><strong><em>The S&amp;P 500 (SPY) stopped short of testing its all-time high as it retreated towards its first post-election close on fresh market risks from an Israel-Iran war.<\/em><\/strong><\/figcaption><\/figure>\n<\/div>\n\n\n<div class=\"wp-block-buttons is-content-justification-center is-layout-flex wp-container-core-buttons-is-layout-5e6b19ed wp-block-buttons-is-layout-flex\">\n<div class=\"wp-block-button\"><a class=\"wp-block-button__link wp-element-button\" href=\"https:\/\/drduru.com\/onetwentytwo\/subscribe-free\/\" target=\"_blank\" rel=\"noreferrer noopener\"><mark style=\"background-color:#0693e3\" class=\"has-inline-color has-white-color\">Join the One-Twenty Two Mailing List for Free<\/mark><\/a><\/div>\n<\/div>\n\n\n\n<p><\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>NASDAQ (COMPQ)<\/strong><\/h3>\n\n\n\n<p>The NASDAQ appears more definitively topped out, failing to challenge its all-time high. A test of the uptrending 20DMA is imminent, but the tech laden index also remains well supported, mirroring the S&amp;P 500\u2019s resilience.<\/p>\n\n\n<div class=\"wp-block-image is-style-default\">\n<figure class=\"aligncenter size-full\"><a href=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2023\/07\/061325-NASDAQ-COMPQ.png\"><img loading=\"lazy\" decoding=\"async\" width=\"1509\" height=\"800\" src=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2023\/07\/061325-NASDAQ-COMPQ.png\" alt=\"The NASDAQ (COMPQ) also stopped short of testing its all all-time high and closed the week near a test of 20DMA support.\" class=\"wp-image-74681\" style=\"aspect-ratio:2\" title=\"NASDAQ (COMPQ)\" srcset=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2023\/07\/061325-NASDAQ-COMPQ.png 1509w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2023\/07\/061325-NASDAQ-COMPQ-768x407.png 768w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2023\/07\/061325-NASDAQ-COMPQ-1320x700.png 1320w\" sizes=\"auto, (max-width: 1509px) 100vw, 1509px\" \/><\/a><figcaption class=\"wp-element-caption\"><strong><em>The NASDAQ (COMPQ) also stopped short of testing its all all-time high and closed the week near a test of 20DMA support.<\/em><\/strong><\/figcaption><\/figure>\n<\/div>\n\n\n<h3 class=\"wp-block-heading\"><strong>iShares Russell 2000 ETF (IWM)<\/strong><\/h3>\n\n\n\n<p>IWM came within a hair of 200DMA resistance before retreating to its 20DMA. I missed a potential buying opportunity on Friday. Again, since I maintain a large core position in shares, I never hate seeing IWM zip upward. I now brace for IWM to retest support at its 50DMA, a test the ETF of small caps missed last month.<\/p>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-full is-resized\"><a href=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2023\/07\/061325-iShares-Russell-2000-ETF-IWM.png\"><img loading=\"lazy\" decoding=\"async\" width=\"1510\" height=\"800\" src=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2023\/07\/061325-iShares-Russell-2000-ETF-IWM.png\" alt=\"The iShares Russell 2000 ETF (IWM) confirmed 200DMA resistance and tested 20DMA support; I expect a test of 50DMA support in coming days.\" class=\"wp-image-74682\" style=\"aspect-ratio:1.995249406175772;width:840px;height:auto\" title=\"iShares Russell 2000 ETF (IWM)\" srcset=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2023\/07\/061325-iShares-Russell-2000-ETF-IWM.png 1510w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2023\/07\/061325-iShares-Russell-2000-ETF-IWM-768x407.png 768w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2023\/07\/061325-iShares-Russell-2000-ETF-IWM-1320x699.png 1320w\" sizes=\"auto, (max-width: 1510px) 100vw, 1510px\" \/><\/a><figcaption class=\"wp-element-caption\"><strong><em>The iShares Russell 2000 ETF (IWM) confirmed 200DMA resistance and tested 20DMA support; I expect a test of 50DMA support in coming days.<\/em><\/strong><\/figcaption><\/figure>\n<\/div>\n\n\n<h2 class=\"wp-block-heading\"><strong>The Short-Term Trading From Fragile to Fearless<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>AT50<\/strong> (MMFI) = 66.2% of stocks are trading above their respective 50-day moving averages (first overbought day)<\/li>\n\n\n\n<li><strong>AT200<\/strong> (MMTH) = 41.5% of stocks are trading above their respective 200-day moving averages<\/li>\n\n\n\n<li><strong>Short-term Trading Call<\/strong>: cautiously bullish<\/li>\n<\/ul>\n\n\n\n<p>AT50 (MMFI), the percentage of stocks trading above their respective 50DMAs, closed at 66.2% after spending 5 days in overbought territory, above the 70% threshold. According to <a href=\"https:\/\/drduru.com\/onetwentytwo\/t2108-resource-page\/\">my AT50 trading rules<\/a>, this breakdown delivers a bearish signal. However, due to solid support across indices, I am not stepping away from my cautiously bullish short-term trading call. If the S&amp;P 500 closes below its first support level, the still converged 20DMA and the first post-election close, I will likely downgrade to neutral. A further breakdown below the 200DMA will make me bearish regardless where AT50 closes at the time. I do not want to react as slowly as I did with <a href=\"https:\/\/drduru.com\/onetwentytwo\/2025\/03\/09\/bring-the-pain-the-market-breadth\/\">the last 200DMA breakdown<\/a>.<\/p>\n\n\n\n<p>Meanwhile, AT200 (MMTH), the percentage of stocks trading above their respective 200DMAs, broke out to a new high but remains far from its 2025 and 2024 peaks. It has not fully healed from the market trauma earlier this year. While the breakout above the trendline is promising, the overarching downtrend is still intact.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>The Volatility Index (VIX)<\/strong><\/h3>\n\n\n\n<p>The VIX sharply bounced off its critical 17 support and closed the week at 20.8, &#8220;elevated&#8221; territory. My slow reaction to the VIX&#8217;s bearish behavior last week motivates me to respond quickly if the S&amp;P 500 cracks 200DMA support. After holding support for the first three days of the week, the VIX gained 4.4% on a market up day; Thursday alone should have been an instant alarm. While I did buy a $SPY 560\/540 put spread on Thursday, I was not responding to the clear and present danger of the VIX. Instead, I felt my trading account needed a fresh &#8220;emergency&#8221; backstop.<\/p>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"1510\" height=\"800\" src=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2023\/07\/061325-volatility-index-VIX.png\" alt=\"The volatility index (VIX) broke out above its 200DMA after a 15.6% jump, signaling heightened market risk and marking an end to its previous downtrend.\" class=\"wp-image-74683\" title=\"Volatility Index (VIX)\" srcset=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2023\/07\/061325-volatility-index-VIX.png 1510w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2023\/07\/061325-volatility-index-VIX-768x407.png 768w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2023\/07\/061325-volatility-index-VIX-1320x699.png 1320w\" sizes=\"auto, (max-width: 1510px) 100vw, 1510px\" \/><figcaption class=\"wp-element-caption\"><strong><em>The volatility index (VIX) broke out above its 200DMA after a 15.6% jump, signaling heightened market risk and marking an end to its previous downtrend.<\/em><\/strong><\/figcaption><\/figure>\n<\/div>\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>The Equities: Fresh Market Risk<\/strong><\/h2>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>United States Oil Fund (USO)<\/strong><\/h3>\n\n\n\n<p>Like the VIX, USO tried to warn us about short-term trading action. The oil ETF signaled strength ahead with a 50DMA breakout, a steady climb along its Bollinger Band (BB), and even a strong 200DMA breakout. In response to Israel&#8217;s bombardment and Iran&#8217;s retaliation, USO surged 6.9% on Friday. However, given the extreme nature of Friday&#8217;s move, well above the upper BB, I faded USO with a July $74 put. I want to give sufficient time for the near inevitable pullback to play out. I will also add to my position on another push higher for USO.<\/p>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"1612\" height=\"793\" src=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2023\/07\/061325-United-States-Oil-Fund-USO.png\" alt=\"United States Oil Fund (USO) rapidly broke out above its 200DMA ahead of Israel's strikes on Iran. The attack sent USO toward its high for the year after a 6.9% jump.\" class=\"wp-image-74684\" title=\"United States Oil Fund (USO)\" srcset=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2023\/07\/061325-United-States-Oil-Fund-USO.png 1612w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2023\/07\/061325-United-States-Oil-Fund-USO-768x378.png 768w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2023\/07\/061325-United-States-Oil-Fund-USO-1536x756.png 1536w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2023\/07\/061325-United-States-Oil-Fund-USO-1320x649.png 1320w\" sizes=\"auto, (max-width: 1612px) 100vw, 1612px\" \/><figcaption class=\"wp-element-caption\"><strong><em>United States Oil Fund (USO) rapidly broke out above its 200DMA ahead of Israel&#8217;s strikes on Iran. The attack sent USO toward its high for the year after a 6.9% jump.<\/em><\/strong><\/figcaption><\/figure>\n<\/div>\n\n\n<h3 class=\"wp-block-heading\"><strong>Fluor Corporation (FLR)<\/strong><\/h3>\n\n\n\n<p><strong>FLR<\/strong> finally broke out above its 200DMA, validating <a href=\"https:\/\/drduru.com\/onetwentytwo\/2025\/02\/23\/red-flag-pullback-from-edge-of-fresh-breakout-the-market-breadth\/\">my earlier bullish expectations tied to infrastructure and AI data center buildouts<\/a>. I plan to add to my position on a retest of 200DMA support.<\/p>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"1611\" height=\"796\" src=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2023\/07\/061325-Fluor-Corp-FLR.png\" alt=\"Fluor Corp (FLR) successfully broke out above its 200DMA with an 11% jump, aligning with bullish infrastructure and AI buildout themes; I will add shares on a pullback.\" class=\"wp-image-74685\" title=\"Fluor Corp (FLR)\" srcset=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2023\/07\/061325-Fluor-Corp-FLR.png 1611w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2023\/07\/061325-Fluor-Corp-FLR-768x379.png 768w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2023\/07\/061325-Fluor-Corp-FLR-1536x759.png 1536w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2023\/07\/061325-Fluor-Corp-FLR-1320x652.png 1320w\" sizes=\"auto, (max-width: 1611px) 100vw, 1611px\" \/><figcaption class=\"wp-element-caption\"><strong><em>Fluor Corp (FLR) successfully broke out above its 200DMA with an 11% jump, aligning with bullish infrastructure and AI buildout themes; I will add shares on a pullback.<\/em><\/strong><\/figcaption><\/figure>\n<\/div>\n\n\n<h3 class=\"wp-block-heading\"><strong>Roblox (RBLX)<\/strong><\/h3>\n\n\n\n<p>Gaming software platform Roblox (RBLX) maintained a strong uptrend that started with a convincing test of 200DMA support at the trough of the tariff drama, trauma, and noise. I remain sidelined as RBLX has yet to test 20DMA support; I am not one to chase unadulterated momentum.<\/p>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"1612\" height=\"797\" src=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2023\/07\/061325-Roblox-Corp-RBLX.png\" alt=\"Roblox Corp (RBLX) continued its steady upwards creep and reached a 2-year high, but has not provided a pullback to even 20DMA support for me to buy.\" class=\"wp-image-74686\" title=\"Roblox Corp (RBLX)\" srcset=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2023\/07\/061325-Roblox-Corp-RBLX.png 1612w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2023\/07\/061325-Roblox-Corp-RBLX-768x380.png 768w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2023\/07\/061325-Roblox-Corp-RBLX-1536x759.png 1536w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2023\/07\/061325-Roblox-Corp-RBLX-1320x653.png 1320w\" sizes=\"auto, (max-width: 1612px) 100vw, 1612px\" \/><figcaption class=\"wp-element-caption\"><em><strong>Roblox Corp (RBLX) continued its steady upwards creep and reached a 2-year high, but has not provided a pullback to even 20DMA support for me to buy.<\/strong><\/em><\/figcaption><\/figure>\n<\/div>\n\n\n<h3 class=\"wp-block-heading\"><strong>Etsy (ETSY)<\/strong><\/h3>\n\n\n\n<p>I made a rare exception on my anti-chasing rule when I bought a low risk $65 calendar call spread on ETSY. ETSY&#8217;s move was even more overheated than RBLX as ETSY closed above its upper BB for six days in a row. And then suddenly ETSY reversed downward even more sharply. In just 4 trading days, ETSY plunged 17% after a small rebound off 20DMA support. If 20DMA support holds with a higher close, I will start to buy shares, assuming that the earlier run-up remains meaningful even if premature.<\/p>\n\n\n\n<p>Let ETSY be a lesson and reminder about the dangers of chasing upward momentum!<\/p>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"1611\" height=\"797\" src=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2023\/07\/061325-Etsy-Inc-ETSY.png\" alt=\"Etsy Inc (ETSY) surged out above its 200DMA, but quickly fell back down 17% to 20DMA support; I took a small call spread and plan to add if support holds.\" class=\"wp-image-74691\" title=\"Etsy Inc (ETSY)\" srcset=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2023\/07\/061325-Etsy-Inc-ETSY.png 1611w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2023\/07\/061325-Etsy-Inc-ETSY-768x380.png 768w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2023\/07\/061325-Etsy-Inc-ETSY-1536x760.png 1536w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2023\/07\/061325-Etsy-Inc-ETSY-1320x653.png 1320w\" sizes=\"auto, (max-width: 1611px) 100vw, 1611px\" \/><figcaption class=\"wp-element-caption\"><strong><em>Etsy Inc (ETSY) surged out above its 200DMA, but quickly fell back down 17% to 20DMA support; I took a small call spread and plan to add if support holds.<\/em><\/strong><\/figcaption><\/figure>\n<\/div>\n\n\n<h3 class=\"wp-block-heading\"><strong>Celsius Holdings (CELH)<\/strong><\/h3>\n\n\n\n<p>Energy drink company <strong>CELH<\/strong> reversed from bearish to bullish since reclaiming its 200DMA as support in March. I am watching for a test of the 20DMA or 50DMA support as potential buy points.<\/p>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"1611\" height=\"795\" src=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2023\/07\/061325-Celsius-Holdings-Inc-CELH.png\" alt=\"Celsius Holdings Inc (CELH) transitioned from bearish to bullish with a 200DMA breakout in March. I now await a test of 20DMA or 50DMA for a potential entry.\" class=\"wp-image-74687\" title=\"Celsius Holdings Inc (CELH)\" srcset=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2023\/07\/061325-Celsius-Holdings-Inc-CELH.png 1611w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2023\/07\/061325-Celsius-Holdings-Inc-CELH-768x379.png 768w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2023\/07\/061325-Celsius-Holdings-Inc-CELH-1536x758.png 1536w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2023\/07\/061325-Celsius-Holdings-Inc-CELH-1320x651.png 1320w\" sizes=\"auto, (max-width: 1611px) 100vw, 1611px\" \/><figcaption class=\"wp-element-caption\"><strong><em>Celsius Holdings Inc (CELH) transitioned from bearish to bullish with a 200DMA breakout in March. I now await a test of 20DMA or 50DMA for a potential entry.<\/em><\/strong><\/figcaption><\/figure>\n<\/div>\n\n\n<h3 class=\"wp-block-heading\"><strong>International Business Machines (IBM)<\/strong><\/h3>\n\n\n\n<p><strong>IBM<\/strong> made a near parabolic move to all-time highs last week, driven by progress with its quantum computing technology. I am watching for the next test of 20DMA support before buying.<\/p>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"1609\" height=\"795\" src=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2023\/07\/061325-IBM-Common-Stock-IBM.png\" alt=\"International Business Machines Corporation (IBM) surged to all-time highs amidst quantum computing optimism; I\u2019m targeting a 20DMA test for a new buy.\" class=\"wp-image-74688\" title=\"IBM Common Stock (IBM)\" srcset=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2023\/07\/061325-IBM-Common-Stock-IBM.png 1609w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2023\/07\/061325-IBM-Common-Stock-IBM-768x379.png 768w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2023\/07\/061325-IBM-Common-Stock-IBM-1536x759.png 1536w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2023\/07\/061325-IBM-Common-Stock-IBM-1320x652.png 1320w\" sizes=\"auto, (max-width: 1609px) 100vw, 1609px\" \/><figcaption class=\"wp-element-caption\"><strong><em>International Business Machines Corporation (IBM) surged to all-time highs amidst quantum computing optimism; I\u2019m targeting a 20DMA test for a new buy.<\/em><\/strong><\/figcaption><\/figure>\n<\/div>\n\n\n<h3 class=\"wp-block-heading\"><strong>McDonalds Corporation (MCD)<\/strong><\/h3>\n\n\n\n<p><strong>MCD<\/strong> remains trapped in a trading range. The fast-food chain is clinging to 200DMA support but looks vulnerable. I am poised to short MCD on a confirmed breakdown. Note how well MCD held 200DMA support in April on an intraday basis.<\/p>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"1612\" height=\"799\" src=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2023\/07\/061325-McDonalds-Corp-MCD.png\" alt=\"McDonalds Corp (MCD) broke down below its 50DMA and barely holds 200DMA support within a broad consolidation; I\u2019ll short on a technical breakdown.\" class=\"wp-image-74689\" title=\"McDonald's Corp (MCD)\" srcset=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2023\/07\/061325-McDonalds-Corp-MCD.png 1612w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2023\/07\/061325-McDonalds-Corp-MCD-768x381.png 768w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2023\/07\/061325-McDonalds-Corp-MCD-1536x761.png 1536w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2023\/07\/061325-McDonalds-Corp-MCD-1320x654.png 1320w\" sizes=\"auto, (max-width: 1612px) 100vw, 1612px\" \/><figcaption class=\"wp-element-caption\"><strong><em>McDonalds Corp (MCD) broke down below its 50DMA and barely holds 200DMA support within a broad consolidation; I\u2019ll short on a technical breakdown.<\/em><\/strong><\/figcaption><\/figure>\n<\/div>\n\n\n<h4 class=\"wp-block-heading\"><strong>Dave &amp; Buster\u2019s Entertainment (PLAY)<\/strong><\/h4>\n\n\n\n<p><strong>PLAY<\/strong> surged 17.7% post-earnings with a 200DMA breakout. As part of risk management, I exited ahead of earnings and now await a pullback to re-enter. As a reminder, I have been trading PLAY as insiders keep buying shares and the market keeps selling PLAY despite the buying. The opportunities have been quite profitable, but, surprisingly enough, just holding after the insider buys has failed <a href=\"https:\/\/drduru.com\/onetwentytwo\/2023\/01\/04\/dave-busters-entertainment-when-insiders-come-to-play\/\">since I first identified insider buying<\/a> as a trading signal.<\/p>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"1609\" height=\"795\" src=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2023\/07\/061325-Dave-Busters-Entertainment-Inc-PLAY.png\" alt=\"Dave &amp; Buster's Entertainment Inc (PLAY) broke out above its 200DMA after a 17.7% post-earnings jump; I\u2019ll re-enter on a pullback to support.\" class=\"wp-image-74690\" title=\"Dave &amp; Buster's Entertainment Inc (PLAY)\" srcset=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2023\/07\/061325-Dave-Busters-Entertainment-Inc-PLAY.png 1609w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2023\/07\/061325-Dave-Busters-Entertainment-Inc-PLAY-768x379.png 768w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2023\/07\/061325-Dave-Busters-Entertainment-Inc-PLAY-1536x759.png 1536w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2023\/07\/061325-Dave-Busters-Entertainment-Inc-PLAY-1320x652.png 1320w\" sizes=\"auto, (max-width: 1609px) 100vw, 1609px\" \/><figcaption class=\"wp-element-caption\"><strong><em>Dave &amp; Buster&#8217;s Entertainment Inc (PLAY) broke out above its 200DMA after a 17.7% post-earnings jump; I\u2019ll re-enter on a pullback to support.<\/em><\/strong><\/figcaption><\/figure>\n<\/div>\n\n\n<h3 class=\"wp-block-heading\"><strong>RH (RH)<\/strong><\/h3>\n\n\n\n<p>Home furnishings company <strong>RH<\/strong> experienced a \u201cgap and crap\u201d post-earnings, closing up 6.9% after being up as much as 19%. These wild price wings have the markings of a short squeeze. <a href=\"https:\/\/seekingalpha.com\/symbol\/RH\">RH has 17.3% short interest<\/a>. The short interest makes sense to me given RH sells very expensive products during <a href=\"https:\/\/drduru.com\/onetwentytwo\/2025\/06\/01\/what-happened-in-the-housing-market-spring-failed-to-spring\/\">a bear market in housing<\/a>. However, only a close below the June low, which would confirm fresh weakness, would get me interested in daring to join the bears (with put options of course).<\/p>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"1612\" height=\"794\" src=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2023\/07\/061325-RH-RH.png\" alt=\"Restoration Hardware (RH) closed the day with a 6.9% post-earnings gain after a gap and crap with a short squeeze likely distorting price action.\" class=\"wp-image-74692\" title=\"RH (RH)\" srcset=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2023\/07\/061325-RH-RH.png 1612w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2023\/07\/061325-RH-RH-768x378.png 768w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2023\/07\/061325-RH-RH-1536x757.png 1536w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2023\/07\/061325-RH-RH-1320x650.png 1320w\" sizes=\"auto, (max-width: 1612px) 100vw, 1612px\" \/><figcaption class=\"wp-element-caption\"><strong><em>Restoration Hardware (RH) closed the day with a 6.9% post-earnings gain after a gap and crap with a short squeeze likely distorting price action.<\/em><\/strong><\/figcaption><\/figure>\n<\/div>\n\n\n<h3 class=\"wp-block-heading\"><strong>Starbucks (SBUX)<\/strong><\/h3>\n\n\n\n<p>Coffee house <strong>SBUX<\/strong> surged 4.3% on positive news about its business in China news. Yet, the stock still failed at 200DMA resistance. I am waiting for a 20DMA test before entering (sound familiar?).<\/p>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"1611\" height=\"792\" src=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2023\/07\/061325-Starbucks-Corp-SBUX.png\" alt=\"Starbucks Corp (SBUX) jumped by 4.3% on China optimism but failed at 200DMA resistance; I am on buy alert on a test of 20DMA support.\" class=\"wp-image-74693\" title=\"Starbucks Corp (SBUX)\" srcset=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2023\/07\/061325-Starbucks-Corp-SBUX.png 1611w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2023\/07\/061325-Starbucks-Corp-SBUX-768x378.png 768w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2023\/07\/061325-Starbucks-Corp-SBUX-1536x755.png 1536w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2023\/07\/061325-Starbucks-Corp-SBUX-1320x649.png 1320w\" sizes=\"auto, (max-width: 1611px) 100vw, 1611px\" \/><figcaption class=\"wp-element-caption\"><strong><em>Starbucks Corp (SBUX) jumped by 4.3% on China optimism but failed at 200DMA resistance; I am on buy alert on a test of 20DMA support.<\/em><\/strong><\/figcaption><\/figure>\n<\/div>\n\n\n<h3 class=\"wp-block-heading\"><strong>Adobe (ADBE)<\/strong><\/h3>\n\n\n\n<p><strong>ADBE<\/strong> dropped 5.3% on earnings but held 50DMA support. The stock is also over-stretched below its lower BB. Despite the support, the long-term trend is weak with ADBE topping out all the way back in 2021. I am staying away.<\/p>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"1612\" height=\"800\" src=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2023\/07\/061325-Adobe-Inc-ADBE.png\" alt=\"Adobe Inc (ADBE) tested 50DMA support after a 5.3% post-earnings drop; I remain cautious due to ongoing technical weakness since the 2021 all-time high.\" class=\"wp-image-74694\" title=\"Adobe Inc (ADBE)\" srcset=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2023\/07\/061325-Adobe-Inc-ADBE.png 1612w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2023\/07\/061325-Adobe-Inc-ADBE-768x381.png 768w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2023\/07\/061325-Adobe-Inc-ADBE-1536x762.png 1536w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2023\/07\/061325-Adobe-Inc-ADBE-1320x655.png 1320w\" sizes=\"auto, (max-width: 1612px) 100vw, 1612px\" \/><figcaption class=\"wp-element-caption\"><strong><em>Adobe Inc (ADBE) tested 50DMA support after a 5.3% post-earnings drop; I remain cautious due to ongoing technical weakness since the 2021 all-time high.<\/em><\/strong><\/figcaption><\/figure>\n<\/div>\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity is-style-default\"\/>\n\n\n\n<p><\/p>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-full\"><a href=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2023\/07\/061325-AT50-MMFI.png\"><img loading=\"lazy\" decoding=\"async\" width=\"1612\" height=\"798\" src=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2023\/07\/061325-AT50-MMFI.png\" alt=\"AT50 (MMFI) broke down below the overbought threshold at 70%, flashing a bearish signal under AT50 trading rules, though broad market support keeps me bullish for now.\" class=\"wp-image-74695\" style=\"aspect-ratio:1.9858156028368794\" title=\"AT50 (MMFI)\" srcset=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2023\/07\/061325-AT50-MMFI.png 1612w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2023\/07\/061325-AT50-MMFI-768x380.png 768w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2023\/07\/061325-AT50-MMFI-1536x760.png 1536w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2023\/07\/061325-AT50-MMFI-1320x653.png 1320w\" sizes=\"auto, (max-width: 1612px) 100vw, 1612px\" \/><\/a><figcaption class=\"wp-element-caption\"><strong><em>AT50 (MMFI) broke down below the overbought threshold at 70%, flashing a bearish signal under AT50 trading rules, though broad market support keeps me bullish for now.<\/em><\/strong><\/figcaption><\/figure>\n<\/div>\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-full\"><a href=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2023\/07\/061325-AT200-MMTH.png\"><img loading=\"lazy\" decoding=\"async\" width=\"1608\" height=\"796\" src=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2023\/07\/061325-AT200-MMTH.png\" alt=\"AT200 (MMTH) broke to a new high since February, but remains in a long-term downtrend, showing incomplete breadth recovery from February\u2013April turmoil.\" class=\"wp-image-74696\" title=\"AT200 (MMTH)\" srcset=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2023\/07\/061325-AT200-MMTH.png 1608w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2023\/07\/061325-AT200-MMTH-768x380.png 768w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2023\/07\/061325-AT200-MMTH-1536x760.png 1536w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2023\/07\/061325-AT200-MMTH-1320x653.png 1320w\" sizes=\"auto, (max-width: 1608px) 100vw, 1608px\" \/><\/a><figcaption class=\"wp-element-caption\"><strong><em>AT200 (MMTH) broke to a new high since February, but remains in a long-term downtrend, showing incomplete breadth recovery from February\u2013April turmoil.<\/em><\/strong><\/figcaption><\/figure>\n<\/div>\n\n\n<p>Be careful out there!<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"footnotes\"><strong>Footnotes<\/strong><\/h2>\n\n\n\n<p><a href=\"https:\/\/drduru.com\/onetwentytwo\/subscribe-free\/\" target=\"_blank\" rel=\"noreferrer noopener\">Subscribe for free<\/a> to get email notifications of future posts!<\/p>\n\n\n\n<p>&#8220;Above the 50&#8221; (AT50) uses the percentage of stocks trading above their respective 50-day moving averages (DMAs) to measure breadth in the stock market. Breadth defines the distribution of participation in a rally or sell-off. As a result, AT50 identifies extremes in market sentiment that are likely to reverse. Above the 50 is my alternative name for &#8220;MMFI&#8221; which is a symbol TradingView.com and other chart vendors use for this breadth indicator. Learn more about AT50 on my <a href=\"https:\/\/drduru.com\/onetwentytwo\/about\/t2108-resource-page\/\">Market Breadth Resource Page<\/a>. AT200, or MMTH, measures the percentage of stocks trading above their respective 200DMAs.<\/p>\n\n\n\n<p><strong>Active AT50 (MMFI) periods<\/strong>: Day #34 over 20%, Day #32 over 30%, Day #27 over 40%, Day #22 over 50%, Day #20 over 60%, Day #1 under 70% (underperiod ending 5 days overbought)<\/p>\n\n\n\n<p>Source for charts unless otherwise noted: <a href=\"https:\/\/www.tradingview.com\/\" target=\"_blank\" rel=\"noreferrer noopener\"><strong>TradingView.com<\/strong><\/a><\/p>\n\n\n\n<p><strong>Full disclosure:<\/strong> long IWM shares, long ETSY calendar call spread, long USO puts, long FLR<\/p>\n\n\n\n<p><strong>FOLLOW Dr. Duru&#8217;s commentary on financial markets via <a href=\"https:\/\/stocktwits.com\/DrDuru\" target=\"_blank\" rel=\"noreferrer noopener\">StockTwits<\/a>, <a href=\"https:\/\/bsky.app\/profile\/drduru.bsky.social\" target=\"_blank\" rel=\"noreferrer noopener\">BlueSky<\/a>, and even <a href=\"https:\/\/www.instagram.com\/ahan.analytics\/\" target=\"_blank\" rel=\"noreferrer noopener\">Instagram<\/a>!<\/strong><\/p>\n\n\n\n<p>*Charting notes: Stock prices are not adjusted for dividends. Candlestick charts use hollow bodies: open candles indicate a close higher than the open, filled candles indicate an open higher than the close.<\/p>\n\n\n\n<p>* Blog notes: this blog was written based on the heavily edited transcript of the following video that includes a live review of the stock charts featured in this post. I used ChatGPT to process the transcript.<\/p>\n\n\n\n<figure class=\"wp-block-embed aligncenter is-type-video is-provider-youtube wp-block-embed-youtube wp-embed-aspect-16-9 wp-has-aspect-ratio\"><div class=\"wp-block-embed__wrapper\">\n<iframe loading=\"lazy\" title=\"Overbought Conditions End with Fresh Market Risks #stockmarket #technicalanalysis\" width=\"1200\" height=\"675\" src=\"https:\/\/www.youtube.com\/embed\/mbyTLUEvhrA?feature=oembed\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share\" referrerpolicy=\"strict-origin-when-cross-origin\" allowfullscreen><\/iframe>\n<\/div><\/figure>\n\n\n\n<p><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Stock Market Commentary The stock market&#8217;s fearless streak met fresh geopolitical headwinds that significantly raised the risk quotient. Tensions surged as Israel bombarded Iran&#8217;s nuclear infrastructure and Iran retaliated, spiking oil prices and triggering a market sell-off that, while sharp, could have and should have been a lot worse. This fresh market risk is a &#8230; <a title=\"Overbought Conditions End with Fresh Market Risk &#8211; The Market Breadth\" class=\"read-more\" href=\"https:\/\/drduru.com\/onetwentytwo\/2025\/06\/15\/overbought-conditions-end-with-fresh-market-risk-the-market-breadth\/\">Read more<\/a><\/p>\n","protected":false},"author":1,"featured_media":74711,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[483,199,1576,1129,219,35,43,377,512,338,1311,511,62,982],"tags":[428,3401,2832,2201,2529,2058,2957,2035,2103,2218,909,1413,3329,413,2528,1758,3745,65,486,362,3598,1375,538],"class_list":["post-74698","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-breakdown","category-commodities","category-entertainment","category-food-retail","category-high-tech","category-housing","category-industrial-sector","category-oil","category-resistance","category-retail","category-software","category-support","category-technical-analysis","category-trading-range","tag-adbe","tag-adobe-inc","tag-at50","tag-compq","tag-dave-and-busters-entertainment","tag-etsy","tag-etsy-inc","tag-flr","tag-fluor","tag-ishares-russell-2000-etf","tag-iwm","tag-mcd","tag-mcdonalds-corporation","tag-nasdaq","tag-play","tag-rh","tag-rh-inc","tag-sp-500","tag-sbux","tag-spy","tag-starbucks-corporation","tag-united-states-oil-fund","tag-uso"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Overbought Conditions End with Fresh Market Risk \u2013 The Market Breadth<\/title>\n<meta name=\"description\" content=\"A geopolitical shock introduced fresh market risk as oil spiked and stocks tumbled from overbought conditions. 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