Overbought conditions are across the board. Its very impressive, especially with such a high momentum. Very few things are not, and those are the stocks that I have kept and am keeping an eye on. This includes BKE (added today, my chart was screwy yesterday but I doubled down on the correct support), SQM, PWR and Natural Gas is seeing its pull back.
Due to the capacity issue with Nat. Gas I was waiting for a collapse, most likely due to the physical dumping of the commodity causing the price to decline.
With this, I will probably play CHK before Thursday. (keep in mind I am becoming a dollar bull, but Nat Gas should not be moving w/the dollar at its price is locally placed, not like crude)
Because of the massive overbought conditions, I did start to protect myself via shorts on MCO (moody's). It is very overbought, considering its crapy situation, and hitting some major resistance. IMO, with a declining market, MCO's decline will be amplified. If the market goes up, MCO's upside should be muted here.
Now, with respect to the market, I am very close to go long the 'king' dollar. (stop laughing :)
I am not crazy, just like I was not crazy shorting the hell out of oil at 140, or selling my entire portfolio except the market short the Thursday before Lehman went under.
I will enter an initial position when the UUP hits around 22.25 due to its support.
I will then enter another position when the 10yr yield breaks the 62 sma upward, unload all call options, probably sell most of my stocks and start going short the market.
When the yield breaches 3.7 (the down trend), I will go very heavy the UUP and short the SP500 for the 'shock' play of rising rates.
If the yield decides to consolidate here, before breaking upward, I will enter a position in TBT. (but only if it consolidates at these levels)