August 24, 2017

Gap up Friday could push indices into strong overhead resistance – nearing short-term overbought

QQQQ gapped slightly higher at the open continued to rally throughout the first half hour of the trading day. This left our signal behind; however, surprisingly we are nearing a short-term overbought state which, in a bear market, is often a good indication of a temporary reprieve to the downside. The question is are we indeed in a bear market. Many of the technicals I follow certainly indicate that we have moved to that sentiment.

According to the futures the market should open Friday with a gap higher. If the futures hold and indeed we move higher this could add another feather into the bears hat, again, over the short-term. THe gap higher should push the indices back into whats should act as an area of strong overhead resistance.

Overbought/Oversold for January 24, 2008 

S&P (SPY) – 46.0 (neutral)

Russell 2000 (IWM) – 47.8  (neutral)

Dow (DIA) – 49.6 (neutral)

Nasdaq 100 (QQQQ) – 44.6 (neutral) 

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