Markets are overbought  – unusual buying reaches unsustainable levels

Well, that was fast! On Christmas Eve we were oversold and here we are just 6 weeks later, and we hit overbought today! The last time the ratio went above 80% (overbought)  was 1/24/18 (you can read that blog post here). Markets dropped sharply immediately after that.

​Simply put, unusual buying in stocks relative to selling is unsustainable at this level. Once our ratio starts falling, we expect a market pullback. We are long-term bulls; pullbacks are great buying opportunities for outlier stocks.

More details to follow in Sunday’s issue of the MAP View for subscribers.