S&P 500 overbought
The SPX could be loosing steam. Just looking at the chart of the S&P 500 we can see that it seems as though it is overbought. The S&P's RSI reading is at 65 roughly on a daily scale and a reading of 73 on a weekly scale. To top it off there has not been a decline of any significance in a while. It seems as though right now is a good time to be assessing valuations given the current RSI reading. The analyst are saying that stock valuations are high, but could go higher. But I disagree. On a daily scale for the last year RSI readings have fluctuated between 35 and 70 for the S&P. With the current overbought conditions and the end of earnings season coming up I think that now is the time that the market looses steam. I don't think that the market can't continue to hold high valuations and tax reform seems more and more unlikely every day. With that said I am calling a top to the market. The S&P is going to start it's decline back down towards 2500 before everyone starts to realize that this is the top. No market crash it's just flat to slightly down from here on out until January. For the week of 10/30 I predict the market will finish down from 2580 to around 2500 to 2525.
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