We find ourselves overbought again, we don't stay here very long before we sell off, this signal is very volatile at these rarified levels. You can see that from the initial thrust from the bottom on March 18th this indicator has been bouncing around from high neutral to overbought since the March bottom. Notice that we usually only stay overbought for a day or two and then in general we have been getting a 3% correction. The beginning of May cluster being the exception where we stayed overbought for 3 days, one below the overbought before rising again.
Also notice that if you shorted at the close each day the ZB closed overbought, there was opportunity to close at a lower price the next day, so for those that shorted yesterday's close it looks pretty good for being in the green today. For those like me that went short earlier, let's give it another day here, it does not look like we will get another trend day today. I expect the A/D line to open much weaker and then yesterday and that should bring the ZB to under the OB line.
-Happy Trading RLT
