Into the Overbought Zone

A week ago, I observed that the Arms Index moving averages remained oversold on a short-term basis, in spite of the market advance. That suggested that the buying could go further and that one should not be in a hurry to try to call a downturn. Now, however, as we can see on the second chart below, the more bullish numbers of the last few days have offset bearish numbers and have pushed the five-day moving average to an overbought condition. 

On the first chart below, I have shown the Dow Industrials rather than the usual S&P 500 chart, because the Dow has not been able to push through the old highs and seems to be encountering resistance. Yesterday it went right to those old levels and quit.  ...301 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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