The Rally Runs Into Resistance

The markets have run into overhead resistance. It became evident toward the end of last week that the sudden rise was being slowed. The trading ranges were much tighter, and the advance was slowing. Then yesterday, we had a news-generated advance, but then a swift pullback. The first chart, below, makes it look as though we are very near the start of the next downward swing

In last Thursday's column it was noted that the Arms Index, as measured by the five-day moving average, had swung all the way from oversold to overbought in just three days. Now the 10-day has giving the same overbought indication. It looks as though the rally is quitting. Therefore I am reiterating the suggestion that aggressive traders nail down profits. Any sign of weakness in here should be treated as a reason to put on speculative short positions....256 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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