I will keep it short tonight. The market experienced another day of tight, range-bound trading. We haven't seen three days like this in quite some time. There is still some room to move on the upside, but according to the indicators I follow a move higher should be minimal. However, buyers have been able to keep SPY above 144.35 (SPX - 1444), obviously a key area of support.
One thing is for certain the market is tightly wound at this juncture and typically when this type of situation occurs the market will make a sharp directional move outside of the range. As I write this futures are up and if it holds at the current levels we could have a nice gap tomorrow. A gap into an already overbought market typically spells trouble for the bulls. WE could get a decent fade opportunity tomorrow.
Have a wonderful night!
Overbought/Oversold levels for February 6, 2007
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SPY - 78.5 (overbought)
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DIA - 70.4 (overbought)
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IWM - 81.4 (very overbought)
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QQQQ - 53.1 (overbought)
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OIH - 77.3 (overbought)
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GLD - 63.5 (neutral)
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Have a great night!
Andrew Crowder, Chief Investment Strategist,
www.crowderinvestments.com