Two weeks ago, our stock market overbought / oversold indicator flashed a bearish signal. At the time, the S&P 500 was 1627. Today, the S&P closed at 1649.60, so this signal has been a loser, to date. Over the years, the overbought / oversold model has been a good performer, but at some point, good systems will "throw in the towel" and cut their losses (-- and get back on the main trend).
- Currently, the Overbought stock signal is still bearish.
- The long-term indicator remains bullish.
- The short-term trend is up.
- Thus, our positions have been dictated by our short-term model.
Note that the overbought indicator looks like it may flip to neutral to slightly bullish soon, so visit our blog regularly (or connect to our twitter).
Happy Memorial Day weekend.
