Thursday, June 30, 2011

Short Term Overbought

The market has become short term overbought as indicated by the McClellan Oscillator.  However, the first day of July tends to be bullish so it would not be surprising to see more upside tomorrow morning.  There have been several instances in the past when a selloff was seen after the 4th of July holiday when the market was overbought, so at least a pullback should be expected next week.

The action this week leaves several outcomes on the table including the continuation of the triangle pattern and also a flat combination.  The current trading environment could easily drag on into labor day at the current pace.

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