Well, I’m starting to look pretty foolish about now, but that’s the way it goes. Today’s big mega rally did not push breadth indicators into overbought territory so there is probably still more upside left in this particular rally leg. Tomorrow being Friday, I really don’t expect much out of the market so if there is going to be a pull back it’s going to have to wait until next week.
Chart below of QQQ showing that the RSI on the 60min chart pushed to 80 today and then closed at 72. This is a perfect set up for a pull back of one degree or another but it’s also pretty clear that an over extended RSI on the 60min charts hasn’t meant much lately, so we’ll just have to see if this time will be different.
What I find to be very interesting over the past week or so that I’ve been back is the lack of selling. Volume has been light so there isn’t much buyer, but there just doesn’t seem to be any selling at all, covert or otherwise. As long as this dynamic remains intact, then I have to expect that the market will continue to rally.