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Many stock charts (e.g. AMZN) are giving mixed signals. Some stocks have shown exhaustion and overbought indications before the DOW reaching an all-time high. |
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Michael - in a trend - up or down - indicators are going to be useless in my opinion. Just look how long AMZN has been 'overbought'.
One thing I learned about indicators - they can stay overbought much longer than your account can stomach trying to short them. I don't use these types of indicators anymore for this very example. As soon as you get caught into a strong trend and your indicator keeps saying it's time to short, you will get hammered. Once the market takes a breather and/or enters more 'choppy' times, the indicator will look like gold assuming you and your account are still trading.