Headed for a Correction
If it were not for the jump in IBM (IBM), the big upside reading in the Dow on Wednesday would look more like the indecisiveness of the broader indices. In reality, it was a market in which neither the bulls nor the bears could get control. We still have a market that is edging higher, but reluctantly. In the meantime, the shorter-term Arms index moving averages are becoming more overbought, and the longer-term moving averages are even more disturbingly overbought.
The second chart below shows how the volatility index, the VIX, has become even more extreme in its complacency. Such a lack of fear continues to be a warning that the markets, in spite of pushing higher, are at an extreme that would be expected to lead to a substantial correction. The danger of a drop here far overshadows the possibility of the rise carrying somewhat further....220 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.
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