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You Were Supposed To Hear This with Josh Brown

RiskReversal Pod

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Recognize the Limits of Momentum

An optimal market environment is characterized by many stocks performing well, but this condition will not last indefinitely. When a significant majority of the S&P 500 stocks exceed their 50-day moving average, it signals an overheated market that is likely to correct. Currently, a median Relative Strength Index (RSI) of 64 indicates strong performance among leading stocks, while others are positioned in the 40s and 50s, suggesting they still have potential for improvement. Awareness of the market's cyclical nature is crucial for prudent investing.

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