Significantly Overbought Market
This morning the DOW was up 170 points with a print high of 16963. By mid-morning the whole gain was wiped out and the DOW was even down 20 points on the day. The S&P futures hit a high of 1991.25 and then we printed as low as 1967.50. By midafternoon the DOW rallied up 120 points closing at 16911. If I was a long term investor and I had bought stocks lower a couple weeks ago I would be looking to sell. We are up over 900 points in 4 business days and the market is extremely overbought. I am looking for a pullback to make a higher low in the 15600-16100 range as the market looks to make a bottom. The S&Ps and the indexes are way too far from the 10 bar moving average. The S&Ps are 45 points away from the 10 bar moving average and anything more than 30 points away is an extreme condition.
Today oil hit a high of 49.71 and inventory numbers were released at 10:30 showing significant inventories. Oil got hit hard trading down to 47.70 and closed around the 48.16 level. Oil is searching for a bottom and the key number on the weekly charts is 48.16. If oil closes above 48.16 on a weekly basis I will get a buy signal for oil on the weekly charts. I am waiting to see where oil closes this Friday. I am hoping oil can make some type of a bottom here.
Today gold got up to the 1149.70 range and then traded down into the 1145-1146 range at the end of the day. Gold is very overbought here. I am not bullish on gold in any way shape or form. If gold does get above the 1155-1175 range I would be looking to sell gold and gold stocks.