In the middle of August, the market and OMXS30 looked pretty stretched. What happened next was a pullback followed by a perfect and sharp bounce of the 50 DMA. The market soon reached new all time highs, fueled by record inflows into equity funds (keeping the bull market intact). Right now we are in the middle of another pullback and yet again we are at the 50 DMA.
August 14, 2013:
The correction after the recent dip has been brutal, perhaps even more brutal than the spring sell of. Many technical indicators now signaling that many markets are overbought or approaching overbought territory.
During the sell of the market low was at 1108,96 (OMXS30). Of course I’d be more comfortable calling a local top with eg RSI >70. But the recent rally has been brutal. The higher we go the bigger the inflows to equities. Even if the market is heading higher there should be room for some sort of correction or profit taking.
Jun 24, 2013:
“The correction after the recent surge has been brutal. It may not look much in a bigger perspective but many technical indicators gives that many markets are quite oversold.
Stockholm OMXS30 hasn’t been this oversold since the middle of 2011 (RSI).”