Market Has Changed From Oversold to Overbought

s&p 500 12 oct 2011

I hope my chart above can explain clearly (click on the chart for a bigger view). Seems like the rally is losing steam and price will drop soon. DJI roughly has the same kind of chart pattern as well.

Just last week, the market was seriously very oversold. Now it’s the reverse, becoming very overbought. I did some check, a lot of US counters are showing signs of weakness (based on my own analysis).

STI had became overbought too. Most likely will have a retrace soon.

In addition, the companies’ quarterly reports will be out soon. People will react based on fundamentals (profits/losses). Market most likely will be volatile again.

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