By John Del Vecchio and Brad Lamensdorf

The stock rally in 2023 has been epic. But is it about to run out of steam?

As the chart below shows, by last fall, hardly any stocks in the S&P 500 were above their 200-day moving average.

Like a rubber band stretched too far, these stocks snapped back quickly.

Today, that number is 75%.


Now the market is overextended.

One of our favorite indicators is the Short-Term Composite, courtesy of Stockcube Research, Ltd.


From a low of 1.7 during the last oversold period, the indicator has shot up to 82.8.

Rarely does it go higher.

Between now and the next time the indicator is deeply oversold (below 10 or mostly likely below 5), a lot of damage may be done.

After all, many stocks rallying the hardest in 2023 have some of the most hair on them.

Time to tighten stops and consider hedges.

To learn more about how these indicators can help manage risk in your portfolio, book a call with Brad. You may book a call here.


Lamensdorf Market Timing Report is a publication intended to give analytical research to the investment community. Lamensdorf Market Timing Report is not rendering investment advice based on investment portfolios and is not registered as an investment advisor in any jurisdiction. Information included in this report is derived from many sources believed to be reliable but no representation is made that it is accurate or complete, or that errors, if discovered, will be corrected. The authors of this report have not audited the financial statements of the companies discussed and do not represent that they are serving as independent public accountants with respect to them. They have not audited the statements and therefore do not express an opinion on them. The authors have also not conducted a thorough review of the financial statements as defined by standards established by the AICPA.

This report is not intended, and shall not constitute, and nothing herein should be construed as, an offer to sell or a solicitation of an offer to buy any securities referred to in this report, or a “buy” or “sell” recommendation. Rather, this research is intended to identify issues portfolio managers should be aware of for them to assess their own opinion of positive or negative potential. The LMTR newsletter is NOT affiliated with any ETF’s.  Active Alts  is affiliated with Lamensdorf Market Timing Report. While LMTR uses charts from SentimenTrader, they do not have a financial arrangement with SentimenTrader  Past performance is not indicative of future results.


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