The price compression period underway for the past several
weeks has eliminated the shorter term overbought and
extended conditions for the market. Despite flashing caution
lights, the market has been bending, but has not broken.
So we find we have a US market that is still trending higher
from its mid-2006 interim low, but one which is still elevated
enough to suffer a sharp correction without losing the trend.
To make matters more interesting, periods of price compression
in the market can last for a good several months and need not
be wound up quickly with a break out or a break down in price.
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