If you have followed the blog over the past month, then you know I
anticipated this most delightful rally. There were promising technical
undepinnings at the end of Aug., but what captured my attention was
so many bulls were conceding a bad Sep. /Oct. interval.
Well, we've had this nice rally. The short term uptrend has been
confirmed, and today the market blew through resistance to the
upside, leaving an apparently clear path for a continuation of the
the rally.
The market is at an interesting point. On my 25 day price oscillator,
we have reached the strongest overbought in about one year's time.
As the chart link below will show, the SP 500 is also getting over-
bought on RSI as well. The routine expectation here is that the
market is due for a pull-back soon. The possible kicker is that should
it get further overbought against the 25 day m/a, it might well be
signaling that a stronger advance is in the offing. I say this also
because my smoothed 40 wk oscillator has turned positive as well.
This latter indicator does whipsaw once in a while and it is not the
best for short term timing, but it has helped me make good money over
the years, both long and short.
SP 500 chart.
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