Tuesday Top?

August 15, 2006 · Print This Article

The market experienced its biggest gap up for the year, which in most cases would be good news for the contrarians out there. Not today, the market kept extending its intra-day highs towards the close. Is this the “Tuesday Top” phenomenon that quite often occurs during options expiration or will the bulls be able to extend today’s gains through weeks end. Given the overbought nature of SPY, the chances for a retracement look highly probable. But, as we all know, in a rallying market we could extend today’s gains until a “very overbought” condition occurs. QQQQ is nearing that area and SPY is not far behind so gains could be limited over the short-term. If the market can hold above 1280, this could be the sign the bulls have been waiting for. Have a great night!

RSI Wilder (5) for August 15, 2006