fbpx Some Statistics on Extraordinary Breadth (Preview) | Option Strategist

Some Statistics on Extraordinary Breadth (Preview)

By Lawrence G. McMillan

Last Friday (January 18th) the “stocks only” breadth oscillator stood at +854.04 – the fourth highest reading of all-time. This is extremely overbought, but is not a sell signal (“overbought does not mean sell”). In fact, in the past, extremely overbought readings have often led to much stronger markets in the short term.

What is somewhat ironic is that the same breadth oscillator registered its most oversold reading in history, at –1410.09, on December 24th. So, in a mere 20 trading days, the oscillator moved from historically oversold to historically overbought. That is rare, but not entirely out of character, either. The previous most extreme overbought readings are summarized in the following table...

Read the full article, published on 1/25/2019, by subscribing to The Option Strategist Newsletter now. 

The Option Strategist Newsletter $29 trial

Share this

Option Strategist
Blog Search

Recent Blog Posts

Trading or investing whether on margin or otherwise carries a high level of risk, and may not be suitable for all persons. Leverage can work against you as well as for you. Before deciding to trade or invest you should carefully consider your investment objectives, level of experience, and ability to tolerate risk. The possibility exists that you could sustain a loss of some or all of your initial investment or even more than your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with trading and investing, and seek advice from an independent financial advisor if you have any doubts. Past performance is not necessarily indicative of future results.
Visit the Disclosure & Policies page for full website disclosures.

-->