Caution Is in Order

Two days ago it looked as though the market had encountered a difficult level as the advance slowed. Conversely, Tuesday brought a new high, but indecision seems to have returned and is even more apparent. Neither bad economic news nor neutral Fed commentary were able to get much of a move going in either direction. But that hesitation, after an entire month of steady advances, suggests the pause is likely to lead to a slide.

The Arms Index is now overbought on all levels, from the five-day to the 55-day moving averages, which suggests that a short-term slide is getting closer, and it could be more than just a small dip. Caution is in order....239 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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