Technically Speaking: Clarifying Overbought, Extended & Bullish

Technically Speaking: Clarifying Overbought, Extended & Bullish




With bullish sentiment and complacency at extreme levels, it only further supports the idea that the current risk of investing new capital in the markets outweighs the potential reward. It is very likely that sometime within the next couple of weeks, to a couple of months, the markets will experience at least an intermediate-term correction.

Could it turn into a more serious correction? Sure. However, we won’t know that until we get there.

I hope this helps clarify things.

For now, holding a little extra cash certainly won’t detract significantly from portfolio performance but will provide an opportunity to take advantage of panicked sellers later. It’s not a question of “if, only of “when.”

 

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