The Rally's Long in the Tooth

As expected, the rally has been able to carry further, with most indices retracing more than half their prior drops, but the Nasdaq, the second chart below, going through the old highs.

Last week we had been looking at an Arms index that was continuing to be quite oversold in spite of the rally. That is still true, indicating a public that is still concerned about the prior drop and using the rally as a selling opportunity, but also leaves room for the rally to go a little further. Another factor to be aware of is that during the recent swings the volume has become heavier on down days, but on advancing days it has become lighter. That, too, reinforces my concern that we seemed to have seen a sudden change of sentiment from bullish to bearish in the middle of July....248 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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