Markets Hit New Highs
Since the beginning of January, the markets have remained in a very low volatility sideways trading pattern as shown in the chart below. However, this past week all three indices broke out to the upside with the Dow moving above 20,000 and the S&P 500 surging above the 2,300 mark.
Not surprisingly, the push this week has once again pushed markets back into extreme overbought conditions as we head into the weakest part of February as I noted previously:
"However, a look at daily price movements during the month, on average, reveal the 4th trading day of February through the 12th day are the best opportunity we will likely have to rebalance portfolio allocations and reduce overall portfolio risk."
(click to enlarge)
As we enter into the statistically weak end of February, a bit of caution may be advisable. Particularly as…
