Where do we go from here?

August 22, 2006 · Print This Article

The S&P remains overbought and the other major indices are not far behind. Furthermore, the S&P, Dow and Nasdaq have yet to close the gap from last Wednesday. I am still under the impression that the market should move lower, closing the gap within the next few days. An overbought state, in most cases, limits the upside potential over the short-term, so if the market is to resume the bullish rally from last week it needs to work off the current overbought situation. We shall see. Also, until volume picks up it is going to be hard to see any conviction from the bulls or the bears. The short-term should be interesting indeed. Have a great night!

RSI Wilder (5) for August 23, 2006