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Caution: Over Bought Market June 7, 2020

Posted by Tom in Thoughts.

June 5, 2020 – This will be a quick post. Obviously the markets continue higher, but also (not) as obvious is we are at the upper limits of a trend and thus (likely) “over bought”. Time to set an exit strategy just in case.

NASDAQ Composite Index: click on image to enlarge

The chart above shows three possible levels to either hedge or begin the exit process if hit; especially on the Close of the day. The high volume concerns me; looks like FOMO (Fear Of Missing Out) is driving this market.

Sector strength is shown in the table below.

I find it most interesting that the sectors that were most lethargic over the past 6 months are now starting to show significant strength. Perhaps a healthy sign, or just some investors trying to catch up before the 2nd quarter ends in a couple of weeks.

That’s it for now. I’m watching the market breath indicators for signs of liquidation. None so far, but . . . .

Have a good week. ………….. Tom ………….

Price chart by MetaStock; pie chart & table by http://www.HighGrowthStock.com. Used with permission.


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