CurtisM

$SPX SPY 60 min chart 11-16-2013

BATS:SPY   SPDR S&P 500 ETF
745 2 6
Weekly RSI on $SPX             chart now at 73 and so is overbought. Have to be on the look out for at least one red candle once RSI in this time frame rises above 70. Might not come next week but maybe the week after.

Monthly RSI on $SPX             chart now at 75 and so is overbought. Have not seen readings this high since 2007. RSI pushed higher in 2007 and will probably push higher before end of month. In 2007 we didn't have the luxury of constant POMO so it's hard to know if this is a valid comparison especially out the front windshield. Will have to wait until it all appears in the rear view mirror.

Daily RSI on $SPX             chart now at 68 so is not overbought. RSI rose nearly 5pts between Thursday's open and Friday's close so could easily push above 70 by this coming Tuesday. Should this happen, then have to be on the look out for some kind of consolidation afterward.

60min RSI at 80 and so is overbought. Don't usually see readings this high without some kind of consolidation.

All of the above hints that the market is in a state of overboughtness and is likely to get even more so and history suggests that the market will at some time in the next week or two have a cooling off period in order to digest recent gains. That might mean a one week pause in the rally or more than that but since the lows of 2009 every pull back has been a buying opportunity and that isn't likely to change in the next few months.

Lot of talk about bubbles out there with IPO's going off left and right. About all we need now is for the announcement that someone is going to build a new building taller than any other in the world.

Sent to you from... the bubble latitudes.

GL in the week ahead.

goldgal
3 years ago
Your comments are always appreciated and insightful. SKEW indicators, divergances in many indicators, nice low VIX, and irrational exuberance all spell problems... even with POMO... something or things is going to happen to rattle this bloated pig, and the selling will be fun to watch.... but it has been an incredible run.
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