In the short-term, the market is now overbought. This chart, the Short-Term Composite, courtesy of Investors Intelligence, represents a composite of dozens of other indicators.
Right now, it’s reaching an extreme level on the upside.
While the current reading of 75 doesn’t indicate a crash is imminent, it does mean the easy money has been made from the extreme oversold reading in September. Back then, I wrote about how the market should rally from that level.
That rally has played out from a low-risk point of view.
As a trader, it’s time to pare back long positions or hedge.
Originally Posted on October 26, 2021 – Time to Hedge?
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