"No time for putting up a chart so…
Look at your 60min charts of $SPX and note that the RSI 14 climbed to 74 and then closed at 70. Usually you can expect a consolidation day following a day when this happens.
Zweig Breadth Thrust closed at 60.19, with 60 being the level that marks huge overboughtness.
On 9/3/10 ZBT rose to 61.13. The next session, which was Tuesday September 7th, the day after the Labor Day holiday, the $NYA closed down almost 100pts.
On 9/13/10 ZBT rose to 63.32, after closing the previous Friday at 60.11. This threw the markets into a consolidation period that lasted the rest of that week.
On 9/20/10 ZBT closed at 61.09. Over the next three sessions, the $NYA would lose 120pts on a closing basis.
On 10/13/10 ZBT closed at 60.71. This led to a consolidation which took the $NYA down, on a closing basis, about 160pts.
On 11/4/10 ZBT closed at 62.26. This was the day after the Fed announced QE2 and was also something like a 95% up day. This led to the November pull back.
$NAMO is within a hare’s breath of tagging its upper BB and if those BB’s weren’t expanding so fast $NAMO would have pierced its upper BB easily today. But it didn’t and close may not count.
None of the other breadth indicators that I follow are giving extreme overbought readings. $NYADV is close, but…
Tomorrow is the last day of the month and the last day of the quarter. What to you think all the MM’s have in mind for the market? $SPX is now up 1.04pts and 0.08% for the month. Do you think the Big Boys are going to allow the month to end in the negative?
And the Q’s are only down about 40 centavos for the month. But make no mistake, with AAPL getting sold off with every pop higher, it’s not going to be easy to push the Q’s positive for March, but don’t put it past them.
Your homework assignment is to find a monthly chart of the $RUT/IWM and zero in on the RSI 14.
Edited by Rogerdodger, 30 March 2011 - 11:39 PM.