Markets Still Overbought

Nothing new to report today. As I mentioned last night, the markets were very overbought and as expected they sold off. However the good news is that this is not a bad selloff as it has happened in recent weeks. The markets did not have huge swings like we have seen in the past few months. Thats means that the markets are becoming more stable and are getting ready to continue their uptrend. Will they break recent all time highs?, that's hard to tell but we have to get ready with good stocks setting up for that possible move. Expect more selling since todays bad action was not enough to bring the markets out of this overbought condition. Make sure your stocks don't selloff too much or you too may have to sell. Maybe this week will be all selling off so expect next week to be bullish. Keep an eye on solar, home builders, financials, shippers and oil stocks. Those seem to be the strong groups and will be the better movers when the market is ready.