As you can see below, the broad stock market has once again made that trip from extremely oversold to extremely overbought, almost exactly like what occurred last summer. As you can see, however, that only meant a few weeks of instability, with the 21-day oscillator (orange line in first chart below) coming back slightly under the zero line before the rally started back up.
The point is that we do expect some lull here, but it is a short-term consideration. From a little bit longer-term, however, as we noted in Monday's post (click here to read), we are seeing the corporate insiders moving much more to a selling posture (as seen in the Gambill Ratio), and the AAII survey has also moved a little too much to the bullish side.
These changes take away a little of the short-term bullish ammunition. So it's a time to put your buying plans in neutral for at least a few weeks to see how this plays out.
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