Calling Up MagicJack

I have always been confused by the use of the word parabolic to describe a sudden and rapid rise in stock price. The word, by definition, describes the curve of a parabola and should include a sudden and rapid decline. A less technical, non-mathematical term would be the literary usage of "hyperbolic," as in hyperbole. If extremely overextended translates to unnecessarily excessive, then the recent market rally has become hyperbolic.

I try to limit my use of adjectives when describing technical action in the market, and present my analysis as an objective observation, but it is getting difficult to look at the behavior of the market with an objective eye. Central bank stimulus, algorithmic volatility, the reach for yield, fear of underperformance -- none of these seem like sound fundamental reasons for equity prices to go hyperbolic. Stock prices are moving from the lower left to the upper left, but many of the accompanying technical indicators are severely overbought. The trading conflict comes from the fact that oscillators can stay that way for a long time and make you broke or rich, or miserable because you can't catch an entry point. The reality is that the easy-trade train has left the station. Opportunities are fewer and more speculative....141 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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