Strong as a Bull, or Overbought?

By: Marty Chenard | Thu, May 7, 2009
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If you look back 22 months, to July 2007, there have been 4 occasions where the 30 day Relative Strength has been 58 or higher.

Those occasions are on the chart below.

Start at the left and observe the first three occasions where I drew the vertical white lines with arrows.

What do you notice?

If you say that the market peaked at each of those occasions, you would be correct.

So now, it is May 7th. and yesterday, the RSI closed at 60, the same level as July 2007. The NYA (New York Stock Exchange Index) has been charging up as if on steroids during the past few days. But still, it is now at an overbought level where market peaks were found in the past few years. That sounds more like caution is the prudent thing right now. Overbought conditions can often last longer than some investors expect, but one thing is clear ... risks levels are now elevated.



Marty Chenard

Author: Marty Chenard

Marty Chenard
Asheville, NC 28805
Tel: 828-296-1200

Marty Chenard is an Advanced Stock Market Technical Analyst that has developed his own proprietary analytical tools and stock market models. As a result, he was out of the market two weeks before the 1987 Crash in the most recent Bear Market he faxed his Members in March 2000 telling them all to SELL. He is an advanced technical analyst and not an investment advisor, nor a securities broker. is dedicated to Stock Market Investors who want the best information on stock charts, stock market trends, stock market timing and technical analysis.

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