Market's Strength Just Getting Started

Last week, holiday-shortened as it was, still was quite significant in that, buffeted by international news, the market did not go to a lower low, but merely seemed to test the prior support. RSI is near an oversold extreme and MACD is looking as though it is ready to cross positive. So yesterday's strength comes as no surprise and should go further. 

Today I would like to show readers a very effective way of using the Arms Index for forecasting intermediate-term market moves. The second chart shows the 21-day overlying the 89-day. Look at each instance where the two lines diverge widely. The longer-term line is serving as a baseline, the "norm" for that market period, away from which the shorter-term line indicates extremes. Especially on the lows, it appears that one could have been a buyer with relative impunity when the lines were as far apart as they are now. ...158 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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