Special Risk Capital Management LLC

Caution: Over Bought Market June 7, 2020

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.

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.