Good Monday morning. Last Tuesday we alerted you to the 'extreme overbought' readings of our leading indexes and sectors, via VRA Investing System analysis. Since then the broad markets have sold off roughly 2-3% and taken the vast majority of the leaders with them.

Importantly, this looks like an overbought pause, only. No technical damage has been done, nor do we expect that any will. The VRA System remains at 11/12 screens bullish, tied with our highest readings on record. As we wrote last week, we expect this pause to last “days”...only. We’re in the most bullish 3 months of the year (through January), we’ll soon enter the even more bullish final week of November (through year end) and there’s that record amount of money that’s still sitting in money markets, looking for a home ($7 trillion). In addition, the Fear & Greed Index has dropped back to 51 (neutral) from last weeks near 'extreme greed' readings of 74. Neutral sentiment right at ATH’s is a reason to be bullish.

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