Market managed to make NEW HIGHs in low volume environment in past few days due to lack of any major economic news. Earnings season is behind us and next week will bring key economic news which has potential to move this market. What shall we expect in coming weeks ahead!!! BPNYA crossed EMA(30) last month triggering BUY signal, however it remains below 70 mark. Volatility ($VIX) is at historical low levels which in turn has allowed this market to make new highs. Divergence between Price and RSI, MACD might get negated if market continues to make NEW HIGH. As we can see that NEW HIGHs are made on lower volume which is not a sign of confidence. Divergence on weekly chart remains in place for now. NYUD is NOT showing any signs of danger to this BULL trend apart from a possible pullback. Market often have a tendency to do opposite to what many expects causing "maximum pain" also known as "maximum pain theory". At present, everyone is expecting a correction or usual summer doldrums, yet market continues to show strength and keeps making NEW HIGHs. At some point, everyone is going to loose patience to wait and jump in the market to avoid loosing further rally. Usually, this is the time when market decides to take the painful turn taking everyone by surprise. Hence, chasing any market can be very risky and we should gauge our risk appetite before making any financial commitments.
What does it mean for our Investments?
Market remains bullish, however be cautious... Comments are closed.
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