Bulls are hitting an extreme, but that doesn’t mean it is the end of the road for the current rally.
While the rally here in May has helped investors out, it may only have a few more weeks left.
With that said, the market has been consolidating for the past two weeks, so I could see a scenario, where the bulls get one final, solid push higher before either consolidating again, or actually pulling back again to test the 200-day moving average.
There are a lot of moving parts, lots of potential news headlines, but I think the key here is to simply avoid stretching your portfolio’s limits with to much long or short exposure, and to keep things nimble and flexible. Being able to ride with the ebbs and flows of this market short-term, and focusing on your hot sectors will be the best thing you can do for yourself and your money.
Here’s the Reversal Indicator:
