XAO Overbought, morning 8/12/2010

Here's the chart I promised last night showing the RSI.2. This is a 2-Day Relative Strength Indicator of the XAO. You can see it is been above the overbought line (70) for several days. More importantly it has been above 80 since the big move up last Thursday. Rarely does the XAO remain very short term OB for that length of time.

Also note that the Slow Stochastic with a setting of 14.3 is also reading overbought.

This is setting up for at least a day or two, perhaps more of downwards action. It could be the start of another retracement similar to the November one - but I doubt it. But - you never never know. Keep watching.

Good luck

Red