(Click on above chart to see enlarged version.)
As I suspected, the 50 Leaders are now registering a short term overbought reading. The percentage of stocks above the 10-Day SMA has now reached 92%.
The previous two time this has occurred (mid-October and mid-November) the market consolidated for a few days then dropped. We may see something similar.
However, given that the seasonalities are favourable, and the dollar can expect to rise, we may see a continuation of the market to test the bull rally high at around 4900 set on the XAO back in mid-October. If it does so, then I think we'll see a significant pull-back.
I'll have a more extensive summary of the week put up on the blog later in the long weekend.
In the meantime, I wish you all a wonderful and safe Christmas.
Lance
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