Upping the Ante

 The rise in all markets on Tuesday was enough to penetrate the resistance we were looking at: 1425-1430 in the S&P 500. So now we are looking for a new turning point in a market that just has become more overbought. The Federal Reserve action had a fleeting effect on Wednesday. One gets the impression it is repetitive and old news, as far as traders are concerned. The immediate rally soon ran into selling.

The low reading on the Arms Index yesterday was offsetting similar readings from 10 days ago and five days ago, so nothing much changed there. However, the 21-day, shown below, and which we looked at two days ago, is even more extreme. That does not bode well for the longer term. I said then "beware." I repeat that caveat....270 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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