For the current market environment, I won’t be relying too much on the as it provides too many signals and that becomes unreliable if you want to swing trade with minimal trades. Although using indicators the shorter time frames are a bit more unclear and speculative, what is certain is in the longer time frames, especially the monthly graph for both NASDAQ and S&P which both suggests that the markets have reached significantly overbought levels since the COVID declines; this may indicate that the markets are more than ready for a good correction to reset before more upside momentum can be made. In the daily graphs, I can currently see a divergence in the peaks of the price action, in the troughs nothing has been confirmed yet as this will build itself in the next few days; this can be supported by decreasing over time (this I had to source from QQQ since the index’s do not have ) which indicates there are fewer participants in the uptrend. Thus, allowing me to assert some sentiment for this trend as many are no longer exposing themselves to higher prices.
With all that being said there isn’t too much new relevant information to analyze but the most recent trading sessions help us gauge that investors are not ready to give up their optimistic perspective of the financial markets as there is yet not much pessimistic news to allow that sentiment to change. However, with important events lined up for the next few periods that may change in that time. Until then very I am neutral due to the fact that everything can change at a moment’s notice. I AM leaning more towards the downside as valuations peaked and investor perspectives grow more irrational.
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