📈 State of the Market

This is critical to understand.

Overbought Market

Right now we are in an extremely overbought market - one of the most overbought levels that we have seen since 1920.

Looking at the image above, you see that we reach this level of overbought 1% of the time. Once we reach this level, our annualized return is -4.1% on average.

Note that there aren’t many data points to support the annualized average so it is not statistically significant, but still should be considered to understand what could happen.

It is very rare for us to see overbought not just on short term timeframes, but also long term time frames.

I wanted to make sure you all understand where we are at and that we may need some time to rest and work off these overbought levels before moving higher.

I give more insight on what this means for you and your trading here: