Doorbuster Markups

The stock market works in an opposite manner to department stores. Investors are excited to buy stocks when they are marked up rather than when they are on sale. This week we have seen a markup on some of the hottest merchandise, the low dollar financial stocks. That will likely entice eager retail buyers over the weekend.

At the end of the day on Tuesday we will be maximum overbought. With all the sentiment indicators lined up maybe we will finally see some downside following that. Have a great weekend.

Please note: I previously said we will be maximum overbought at the end of the day on Monday in error.

8 comments:

Anonymous said...

Question, how do you determine Tuesday vs. Monday.

Tsachy Mishal said...

Its a 10 Day moving average so its based on the numbers we are dropping. But for simplicity's sake the current rally started December 1 and will be ten days old at the end of the day on Tuesday.

Tsachy Mishal said...

10 trading days.

Anonymous said...

so not set in stone, what's ur take if we print march s&p 1240+ today? would seem stretched

Anonymous said...

so ur going with a time cycle vs price to figure overbot.

Tsachy Mishal said...

I find that its easier to predict the duration of a rally than the magnitude. Once a market has rallied for two weeks straight it becomes max overbought and I have found that continued upside is difficult.

Tsachy Mishal said...

The problem with using price to determine overbought is that the strongest rallies start with strong thrusts higher and a price based indicator would say that rally is overbought after a day

Anonymous said...

When's the last December you had sentiment and options data like we have now. Myabe never. To assume all Decembers roar higher is a bit naive.