We Have Room to Slide Lower

Even the anticipation of and then the delivery of an ostensibly positive major economic address by the president on Wednesday was not enough to overcome the underlying fact that we were in a difficult market position. Most indicators were very overbought, and movement had become particularly difficult. So an early rally quickly became a substantial slide.

But the drop has done nothing, so far, to correct the overbought situation. In fact, the Arms Index was giving low and bullish readings throughout the session, even as prices dropped. On the second chart below, we see that the five-day and 10-day moving averages are both at quite extreme levels....275 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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