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S&P 500 Relative Strength Stock Market Index is Most Overbought Ever: Be Careful!

S&P 500 Relative Strength Stock Market Index is Most Overbought Ever: Be Careful!

Posted June 10, 2020
Brad Lamensdorf
Lamensdorf Market Timing Report

We use numerous indicators to guide us on the strength and weakness of the stock market in terms of when to buy, sold and hold.  One of the important short-term indicators we follow is the 14-day S&P 500 Relative Strength index (RSI) which shows us the percentage of stocks that are overbought or oversold in the S&P 500.  

When the S&P 500 RSI is above 70% that tells us the stock market is overbought. Meanwhile, 30% and below tells us that the market is oversold. That generally indicates buying opportunities.  The chart below shows us that the S&P 500 RSI is not only over 70 but is at its most overbought level ever. That is an indication to be very careful.  Certainly for the short-term.

S$P 500 index vs RSI

Originally Posted on June 9, 2020 – S&P 500 Relative Strength Stock Market Index is Most Overbought Ever: Be careful!

Disclosure: Lamensdorf Market Timing Report

Lamensdorf Market Timing Report is a publication intended to give analytical research to the investment community. Lamensdorf Market Timing Report is not rendering investment advice based on investment portfolios and is not registered as an investment advisor in any jurisdiction. Information included in this report is derived from many sources believed to be reliable but no representation is made that it is accurate or complete, or that errors, if discovered, will be corrected. The authors of this report have not audited the financial statements of the companies discussed and do not represent that they are serving as independent public accountants with respect to them. They have not audited the statements and therefore do not express an opinion on them. The authors have also not conducted a thorough review of the financial statements as defined by standards established by the AICPA.

This report is not intended, and shall not constitute, and nothing herein should be construed as, an offer to sell or a solicitation of an offer to buy any securities referred to in this report, or a “buy” or “sell” recommendation. Rather, this research is intended to identify issues portfolio managers should be aware of for them to assess their own opinion of positive or negative potential. The LMTR newsletter is NOT affiliated with any ETF’s.

Active Alts is affiliated with Lamensdorf Market Timing Report. While LMTR uses charts from SentimenTrader, they do not have a financial arrangement with SentimenTrader.  Past performance is not indicative of future results.

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