Longs become increasingly risky as market gets overbought

Many market participants were bullish about Wednesday's and Thursday's bounce after a sharp pullback and were calling it a good time to add to long positions.

However, long positions become risky when the short term oscillator becomes maximum overbought, as it did so on Wednesday.

Coupled with the fact that the intermediate term indicators are still in neutral to overbought territory, this makes it very risky to play the long side.

Indeed, despite the initial bullish outlook today, the market has faded hard and fast, catching the over-eager bulls once again.







Longer term, the market still looks healthy and the intermediate term uptrend is still intact.