Not Buying This Rally

The rally we were anticipating a week ago, because of the oversold readings of our indices, has occurred, but the impression is that it may have already run its course. The shorter-term Arms Index moving averages are now back to neutral positions, and the offsets are such that they could go to overbought very easily. The volatility index, the VIX, has moved back to a level that suggests too much complacency. The Street seems to have completely discounted or ignored the possibility of adverse repercussions from the debt-ceiling problem. 

The lack of volume is one additional reason to doubt the validity of the rally of the last few days, and another is that there was no washout volume or violent swing on the low. Even though the markets are responding to every news item or even a hint at any Washington action, trading volume is surprisingly quiet. We saw this rally coming, but I am unwilling to buy into it at this time....202 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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