The market continues to drift higher on very light volume. Light volume generally reflects a lack of enthusiasm among investors. Moreover, the market is short-term overbought. I don't believe it is prudent to chase a market that is up so much in a very short time. Since we are clearly in an intermediate term uptrend, I will look to add equity positions only on meaningful pull-backs.
While the low-volatility funds in which we are primarily invested will underperform the major stock market indexes as long as the market remains overbought, we can take comfort in the fact that our high yield/income funds continue to earn very high dividends and interest with a very low level of risk and volatility.
Overbought
What does overbought mean?
1. A situation in which the demand for a certain asset unjustifiably pushes the price of an underlying asset to levels that do not support the fundamentals.
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