The stock market is overbought on all measures for
the ten day short term. It is also on the verge of making
my intermediate term view the wrong view. I have argued in
recent weeks that 6-13 week breadth and momentum indicators
portrayed a developing topping process. But, at this juncture
I would have to say that unless there is a sharp sell-off
starting at some point over the next week or two, the idea
of a topping process may have to be shelved.
The last technically strong entry point I had was in June/July
2006. The rally that began then was a terrific one to trade or
ride. The rally that kicked off in the first half of March, 2007
did not have the deep oversold pedigree I prefer and I have passed
on it. The tough thing for me is that viewed short term, this is
a respectable run-up, nonetheless.
So, from a technical perspective, I am on the beach for the next
two weeks, left to hope we get a sharp correction to a stiff
overbought. Now the existentialists out there will chuckle at
this, remembering as they will that Albert Camus was fond of
saying that "to hope is to despair"....
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