By Lawrence G. McMillan, MarketWatch
The S&P 500 index is opening at new all-time highs this morning, fueled by a very euphoric response to perceived rate cuts coming in both Europe and the U.S. That doesn’t seem like a recipe for long-term market success, but we are concerned with how the indicators look, rather than trying to predict what a small group of central bankers might do.
Consequently, nearly all of our indicators are now on buy signals, but overbought conditions are beginning to appear. Since early 2018, every time that the S&P 500 /zigman2/quotes/210599714/realtime SPX +0.28% has made new all-time highs, it has been accompanied by extreme overbought conditions that quickly wear on the market. We will see if this time is any different.