An Unsustainable Move

Suddenly the markets have become very overbought, according to the Arms Index moving averages. The extremely steep advance on miniscule volume over the last week can be seen on the first chart, below. The move appears to be unsustainable without a pullback soon. In fact, on Monday, the trading was in the narrowest trading range seen in months, a sign of a stalling of the advance. 

On the second chart we note the very overbought levels of the five-day and 10-day Arms Index moving averages. Not shown, but also disturbing, are the 21-day and 55-day. They suggest that a pullback could be deeper and longer lasting....279 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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