Monday, July 26, 2010

Market Becoming Overbought

The market has reached a point as evidenced by the NYSE McClellan Oscillator that usually signifies an overbought condition. Rarely it has indicated the initiation of a new long term uptrend. That is probably not the case here as volume is lagging severely. It would be prudent to wait for a pullback before entering new long positions. The pullback may begin anytime. I don't think we are at a rally top yet, but we will probably see a declining tops pattern in the NYMO as occured last year, which will warn of the impending top.

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