No Turning Point Yet

Monday's strong market advance produced, as can be seen on the Arms Candlevolume chart below, a tall box that took the S&P 500 decisively through the highs set in December and January. That suggests that the advance has not run out of energy yet and that the hesitation of all last week was not a turning point. So, as suggested previously, long positions should be held, but stops should be protecting the profits. 

Looking at the first chart, below, though, we see that the relative strength index across the top has now become somewhat overbought, and the MACD across the bottom is at an extreme. Both are warning that the move has gone too far too fast, and we are probably nearing a downturn. Moreover, the two-month cycles call for a high in this vicinity and the next low toward the end of March....283 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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