(Photo by JOHANNES EISELE)
AFP via Getty Images
The Nasdaq Composite continues to lead stock market strength. It set a new all-time intraday high of 10,086.90 on June 10. Now it’s extremely overbought with a 12-week stochastic reading above 90.00, which defines an inflating parabolic bubble.
The S&P 500 has become overbought, but it suffered an “island reversal” between June 5 and June 11. This is a sell signal!
The Dow Jones Industrial Average also had an island reversal and it ended last week below its 200-day simple moving average at 26,312. The Dow Transportation Average failed to hold its 200-day simple moving average at 9,801 on June 10. The Russell 2000 also failed to hold its 200-day simple moving average at 1,480.96 on