Friday, December 10, 2010

Overbought readings

At this juncture, the stock market looks very overbought. While timing declines based on such indicators in not of much value, it certainly does imply that any further gains from here will be tenuous and prone to sudden downdrafts. The indicators I follow for this are:
  • CBOE index and equity put/call ratio
  • ISE sentiment index
  • VIX/VXO volatility indices

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