This Boring Action Doesn't Bode Well

The markets remain extremely dull. Any movement is accomplished very reluctantly and, on top of that, volume has been miniscule. Only on Friday was it a bit higher, and that can be entirely attributed to expiring July options.

Is this just the summer doldrums, or is it something else? I see this as being more important than just boring action. Light trading and small changes are typical of markets that have reached difficult overhead resistance. After a month on the upside, the markets are due for a pullback -- and most indicators, both short-term and longer-term, are reading as overbought. The second chart below shows that the 55-day moving average of the Arms Index is at its most overbought level in nearly two years. That suggest more than just a few down days....312 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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