Indicators We are Watching – Overheating, Preparing Hedges

There are signs that markets are beginning to overheat. This is the first time since mid-October that we are seeing the NYSE Advance/Decline Oscillator rise above 500. That has been a sign of an overbought market environment which may be due for a near term correction. While the buy-the-dip mentality persists, disappointing economic reports and the start of earnings season may just be the catalyst that changes the current trend…at least temporarily.

But, we have seen this before and it is wise to react only once the trend is confirmed, rather than to stand in front to it.


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Disclosure: Horowitz & Company clients may hold positions of securities mentioned as of the date published.