this week impressive advance had pushed the S&P into the red zone, or extreme overbought territory, which we’ve determined using our proprietary momentum indicator. Like a rubber band, stocks tend to snap back to the mean if they have moved too far from the “fair” value. With that said, in a normal market condition, given everything being equal, the market is setting up for a short-term pullback consolidation. So, it should not be surprising to see some short-term weakness in the coming days. As for strategy, the general trend remains bullish so trader should consider buying into market dips.
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