When Giddy Shifts to Nervous

I heard someone on television say the market was the most overbought it's been in three years. Wow -- I have no idea what measure they are using, but I don't see one indicator showing the market as being this overbought. In fact, as we discussed Monday, thus far many overbought indicators are at lower highs. Also, perhaps this person was using "three years ago" as a general area, but that means January 2009, and we all know the market wasn't grossly overbought at that point. Your mother probably taught you that you can't believe everything you hear, and I would have to concur as far as this is concerned.

I would note, however, that the Nasdaq had its first two-day losing streak since Christmas week. I realize "losing streak" is a loose term -- if we add up the total loss over these two days, the Nasdaq declined about 4 points. Nevertheless, those two down days, along with all the chatter about the overbought condition, seemed to bring out the put buyers: The put-call ratio rose above 100% for the first time since the final days of December. So, whereas last week there was a sense of giddy-ness in the market, more caution was clearly being practiced Monday....343 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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