The Dow futures are up about 200 points and we are near all-time highs — but the market is less bullish than you might think.
The Dow Jones is following the trend of divergence that the Nasdaq 100 and S&P 500 have recently been showing.
With all three indices showing strong divergence, this is telling me that markets are overbought and stretched out.
Taking a second look at the Nasdaq, out of 100 stocks in there, 83% are trading above the 200-day moving average.
If you look back historically, you can see the when the percent of stocks in the Nasdaq hits over 80 percentile momentum levels tend to decline.
And on top of that, there are about 8 Nasdaq 100 stocks less trading in the 50-moving, yet the Nasdaq continues to make all-time highs.
To give you a clearer picture of what that means for the market, picture this:
Let’s say your driving a 6-cylinder car at 20 mph, and two of those cylinders give out.
But you still need to maintain the original speed, so you pushing that engine a lot harder until it’ll start to give a little.
And that’s what I’m seeing with the stock market now — typically the narrowing of momentum leads to a correction.
That’s why, for the next week or two, it’s a good time to focus on income strategies.
And to generate large amounts of income in this market, you need to get creative.
Savings accounts… stocks and bonds are paying next to nothing these days thanks to the Fed’s low rate policies.
That’s where my friend and fellow trader Rob Booker comes in. He just developed a new strategy that allows you to collect $1,050 (or more) every Monday morning.
It doesn’t involve buy-and-hold investing or likely anything you’ve ever tried before, but it is extremely easy.
All it takes is three clicks of the mouse and the cash is instantly added to your trading account.