Bulls On Offense

It appears that the bulls are not going to waste their opportunity to take the market higher. The overbought/oversold indicator I use will be dropping negative numbers for the next three days which gives the bulls an advantage. If the bulls manage a rally we will have a better overbought reading on Friday. I will monitor the sentiment indicators over that period. If we see extreme optimism combined with the overbought reading we will be primed for some sort of a pullback or correction.

There has always been performance chasing for as long as there have been markets. But it is even more extreme in today's markets. The market does not stop going up until it sucks everybody back in. We are currently in that process which is why I am monitoring  the sentiment indicators. The sentiment indicators are likely to turn extreme before we see a lasting top.

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