Fighting Hard

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In my post last evening, I discussed the different situations in which the market is overbought. At times, there is good, or bullish, overbought. Other times, an overbought market offers a high probability short setup. In the current market, the broad market flagged overbought on a variety of indicators yesterday. Today, there have been various points throughout the session where it looked like so many other sessions over the past few months, in which the bulls basically gave up the goose and let gains slip away in an instant.

However, as I write this in the final hour of trading, the bulls are putting up more of a fight in the face of an overbought market than I recall seeing in months. Hence, we are still looking for this concept of an overbought market fighting to STAY overbought as a positive sign for the bulls. Absent that, a nimble, cautious approach is still clearly on the table, front and center.