Wednesday, March 18, 2009

Video - Overbought Conditions Warrant Caution

Here's a short video looking at the very overbought conditions we are facing now and why I think caution is warranted, especially as we move into heavy resistance. To be completely fair, however, I have been saying this for the entire week, so maybe it doesn't matter. In my heart of hearts, I still don't believe this is THE bottom, but I have to respect the action we saw at the end of the day today. That being said, this market is getting ahead of itself and really has to pullback at some point soon. If it does in a calm manner, then I will definitely have no problem playing the long side. I just don't think that's a good idea right now. The video goes over some indicators showing how stretched we are and also some stocks to focus on over the next few days (watch how they act and if they hold up on a pullback).

Overbought Conditions - 3/18/09

Good luck tomorrow - the days after Fed decisions are notoriously volatile and unpredictable, so be careful out there. If we happen to gap up tomorrow, I may have to try a few small short positions, trying to catch a pullback. Friday is options expiration as well - things should be crazy the next two days.

To download directly, right click the above link and "save link as".

No comments: