While it may seem as though there is a seriously overheated situation within the current markets, the Key Reversal Indicator is starting to show signs that Markets are Overheating. While it does show that there is potential for downside from here, we would prefer to see a reading over 3 to provide a clear trigger.
The best use of this indicator is when there is a overbought or overheated condition. When markets are in equilibrium, it means that the buying and selling pressure as well as the force behind the move is balanced. For now, there are pressures that have been seen on both sides, although the buyers are clearly in charge at the moment.
(LISTEN TO THIS WEEK’S PODCAST FOR MORE INSIGHT ON THE KRI INDICATOR)