No Need to Fear Missing Out

Igor Manukhov - Jun 16, 2023

Markets are becoming overbought on the short term basis. A pullback would be a good buying opportunity.

What a difference one year makes. Last June the markets were in a dire state and now things are really looking up. I do believe we are witnessing a new bull market developing in front of our eyes, but I am a bit concerned about how fast it is advancing. One of the indicators that I track is the Relative Strength Index (RSI). This indicator tracks the strength of buying pressure vs the strength of selling pressure. Most of the time it fluctuates between a 30 and 70 reading. Readings under 30 represent extreme pessimism and could indicate a possible rebound. Readings of 70 or above indicate euphoria and can serve as an early sign of a potential pullback. The current reading of RSI is over 76. I have indicated on the chart below previous instances of RSI approaching 70 (blue circles) and most of the time there was a pullback of some sort.

Considering overall market conditions and the fact that bond spreads (green line at the bottom) are actually going down, indicating that bond traders are less worried, I do not expect another bear market, just maybe a pause or a brief pullback. No need to fear of missing out, opportunity will come to you.

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No Need to Fear Missing Out

Igor Manukhov - Jun 16, 2023

Markets are becoming overbought on the short term basis. A pullback would be a good buying opportunity.

Igor Manukhov

Peter Kuntyj

Yelena Manukhova

Brittany Stone

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