The Nikkei’s 14-day Relative Strength Index (RSI) exceeds 80 and we can’t recall ever seeing anything as short-term oversold — in a hard currency market — as the yen/dollar with its RSI of 10.   The Russell 2000 is the most overbought of the U.S. equity indices with an RSI of 73.   Should set up for an interesting week of consolidating last week’s big gains.

 

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WIR_Overbought

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WIR_Global Trend

WIR_Equity_MA

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Category: Markets, Think Tank

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One Response to “Global Trend Indicators: Equities Overbought, Yen Oversold”

  1. Stocks are overbought and, thus liable to some correction. However, we must bear in mind that a primary bull market signal was signaled by the DowTheory on January 2. Since ca 70% of the Dow Theory signals ends in profits the odds favor higher prices ahead. At least, I wouldn’t short this market in spite of its being overbought.

    http://www.dowtheoryinvestment.com/2013/01/dow-theory-special-issue-assessing.html

    Regards.