There are no sure trading bets. Markets that are overbought can continue to remain in overbought territory for extended periods (B). Eventually markets do fall back to normal levels (A). In the case of Hump Markets they fall back to the surface. The markets on the Hump list are simply over extended and in a position to reverse on a short term basis.
Waiting for the other shoe to drop?
Hump markets are those that have risen to high levels during what is still considered to be a bear phase. Given their recent surge, these markets are at short-term tipping points. If bear trends remain in tact, having these markets in overbought territory makes them sell-on-hump candidates. If however, recent surges help to establish new bull trends then new long candidates are on the horizon down the road. Establishing new longs on these markets now is not recommended as the strength of their trends are still bearish by nature. Take a more wait and see posture. Should these markets continue to rise, look for opportunities to establish long positions. To assist in finding these opportunities, our Dip Market List provides candidate markets that are in established bull trends that have fallen to over sold territory.
Hump Market Definition:
- Bearish trending phase based on our Trend Level indicator.
- Short-term overbought based on our Elastic Level indicator.
Hump Markets: Bearish Trends that are also Strongly Overbought
Our watch list information is strictly provided for educational purposes only. As always … trade at your own risk and analysis.
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