today should be a nice test of whether or not this market is just plain tired or if it has more gas in the tank. nothing but good news on the economic front with a, once again, better than expected employment report. this isn’t necessarily a “call” for a down close today, although i do expect it even though the futures are pointing to a nice positive open as i type. my point is more so that i’ll be curious to see if the market will hold or add on to the positive news-induced pre-market gains into the close today. if so, this market still has enough willing and eager buyers on the sidelines and if not, it would likely signal buyer exhaustion
one other thing to note: you might recall is post i made a few weeks ago as the QQQ/NDX was approaching the 80 level on the RSI (14), which is an extreme overbought reading that is not often reached. well, we of course since went above that level since that post and as i had noted, the RSI readings can and often has remained in overbought territory (a reading of 70 or higher is considered overbought on the RSI) for a few days/weeks before dropping back below the 70 level when the ensuing sell-off began. if you take a look at the QQQ daily chart below, you will see that we will most likely get a cross back below the 70 level if the market closes in the red today, giving us another sell signal.
