From our entry point on October 21st, we are up a little over 7% in S&P 500. The S&P 500 has been busy eking out new (marginal) all-time highs and this upswing may have overstayed its welcome. S&P 500 is extremely overbought on all indicators that I monitor: MACD, Commodity Channel Index, and the market breadth indicators such as ITBM (Intermediate Term Breadth Momentum Oscillator).
I covered ITBM in my previous video from November 10, when it first recorded a very rare reading of over 200. Looking back, I was only able to find 2 other instances of this high of a level. Both times a market decline followed.
1. counter-trend bounce
2. GDX is a very volatile security
XLF came under some selling pressure/profit taking, while the rebound in XLE was rather weak to begin with - no doubt because of an unending slide in oil prices.
That’s it for this week. Thank you for reading and listening and have another great trading week!
Alexander Berger (www.MasterChartsTrading.com)