It’s only been 9 trading days since the stock market began its latest recovery. During this short period, the Dow, S&P 500 and Nasdaq rose 6.91%, 6.89% and 6.28%, respectively. This is an impressive performance, however, it may mean that stocks are slightly over-extended now.
Additionally, the graphic below shows a high percentage of stocks trading above their 10-day moving averages for all 3 indices. This suggests that things may have to cool off for a short while before the probable move up can continue. Friday’s sideways action may have been the first sign that this has already started.