{"id":24399,"date":"2025-06-27T07:30:00","date_gmt":"2025-06-27T11:30:00","guid":{"rendered":"https:\/\/jeffclarktrader.com\/market-minute\/?p=24399"},"modified":"2025-08-22T08:58:41","modified_gmt":"2025-08-22T12:58:41","slug":"the-rubber-band-is-stretched-too-far-to-the-upside","status":"publish","type":"post","link":"https:\/\/jeffclarktrader.com\/market-minute\/the-rubber-band-is-stretched-too-far-to-the-upside\/","title":{"rendered":"The Rubber Band Is Stretched Too Far to the Upside"},"content":{"rendered":"

You don\u2019t have to be bearish to be looking for the stock market to pull back in the short-term.<\/p>\n

The relentless rally off the April low has created overbought conditions, which is generating multiple caution signs \u2013 many of which we\u2019ve written about in Market Minute<\/em>.<\/p>\n

The proverbial rubber band is quite stretched to the upside.<\/p>\n

Even bullish traders, who expect the broad stock market will be much higher in the months ahead, ought to be careful chasing stocks in the current environment. We\u2019re likely to see lower prices in the days ahead.<\/p>\n

Look at this chart of the S&P 500 along with its Bollinger Bands\u2026<\/p>\n\n\n

\"\"<\/figure>\n\n\n

Bollinger Bands show the most probable trading range for a stock or an index.<\/p>\n

\u00a0As you can tell from this chart, the upper Bollinger Band (BB) has proved to be solid resistance for the S&P 500. Anytime the index has approached its upper BB, it turned lower within just a few days.<\/p>\n

Some of the declines were mild \u2013 like the small, 70-point pullback we saw last week. Other declines were more significant \u2013 like the 250-point decline in one week investors endured last July.<\/p>\n

At the very least, any upside the S&P gained while in this condition was given up in the days ahead.<\/p>\n

Admittedly, I am leaning bearish. So, my bias is to look for evidence that supports a bearish argument.<\/p>\n

But, even bullish traders should struggle to look at the above chart and argue for an immediate, sustained move higher in the short term.<\/p>\n

Folks who are looking to put money to work in the stock market ought to hold off at least for a few days. There\u2019s a good chance we\u2019ll have a better opportunity to buy stocks at lower prices in the days ahead.<\/p>\n

Best regards and good trading,<\/p>\n

\"Signature\"<\/p>\n

Jeff Clark
Editor, Market Minute<\/em><\/p>\n

\n

Free Trading Resources<\/strong><\/p>\n

Have you checked out Jeff\u2019s free trading resources on his website? It contains a selection of special reports, training videos, and a full trading glossary to help kickstart your trading career \u2013 at zero cost to you. Just go here<\/a> to check it out.<\/p>\n<\/div>","protected":false},"excerpt":{"rendered":"

Even bullish traders ought to be careful chasing stocks in the current environment.<\/p>\n","protected":false},"author":100,"featured_media":0,"comment_status":"closed","ping_status":"0","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"ep_exclude_from_search":false,"service":"","footnotes":""},"categories":[1],"tags":[],"publication":[10],"person":[7],"newsletter-type":[],"ticker":[],"class_list":["post-24399","post","type-post","status-publish","format-standard","hentry","category-market-minute","publication-market-minute","person-jeff-clark"],"acf":[],"_links":{"self":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts\/24399","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/users\/100"}],"replies":[{"embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/comments?post=24399"}],"version-history":[{"count":2,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts\/24399\/revisions"}],"predecessor-version":[{"id":25079,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts\/24399\/revisions\/25079"}],"wp:attachment":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/media?parent=24399"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/categories?post=24399"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/tags?post=24399"},{"taxonomy":"publication","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/publication?post=24399"},{"taxonomy":"person","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/person?post=24399"},{"taxonomy":"newsletter-type","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/newsletter-type?post=24399"},{"taxonomy":"ticker","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/ticker?post=24399"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}