@martis - pls try and read all of this if you can. Also the earlier Post re bubbles, etc., which I think you read and replied to (briefly). I'm going to some trouble here.
"uncertainty on a global scale"
As we all know if there's one thing markets hate most, it's uncertainty (Wall St slogan).
US equities markets are at or near record highs.
So, it appears they are not as uncertain as you.
I can tell you for a fact that it was the US decision not to seek a second UN resolution for use of military force in Iraq at UN in late 2002 (as Tony Blair wanted), and by implication, so finally, chose to invade Iraq.
A decision had been made. This ended the 2000-2002 "tech crash" (which it wasn't, as I keep saying, even GE fell 50%...and has still never come back...check it out).
I was there (on Wall St.), for 25 years, and watched the US Rep to the UN come out and say on CNBC "US not seeking a a second resolution". As soon he uttered the words, the markets reacted positively. They didn't care: war, or no war, just make a damn decision.
(maybe the arms suppliers cared, but let's not get distracted).
So, many including me), call it the Iraq rally, which continued until 2007-2008 and the next crash...a far more severe one, not a stock market crash, a global banking crisis. I might add that a stock market crash doesn't cause a bank collapse, but the reverse is certainly true). Market Crashes are pretty much BAU, for those who've been around a bit....the noise of the markets...human nature doesn't change. SNAFU.
"The dow is extremely overbought"
I can never figure out what overbought / oversold means. You can use a price derivative oscillator, say, RSI (many others, CCI, DMI, whatever), which exceed a certain level, and send a mechanical SELL signal (if overbought), and vice versa. If only it were so easy. Sadly, it's not (else we'd all be rich).
If the DOW (and S&P 500 etc.) or anything for that matter are "overbought" it's precisely because they are trending up (it's that simple), they are nothing more than reflection of the current price trend , and vice versa, say, for US gold price (XAUUSD). And we know the trend is your friend (another slogan)...and it is....for sure....
The current buying is not a reversal, by any means, and those who've been in markets for a few decades (or just one, or half of one), understand that price doesn't move in a straight line (pretty obvious) - gold now only 2-3% off recent lowest close of 15/12/2016, and not yet made a higher high and higher low on DAILY Chart, and then pulled back to test the new Support (and so, provide confirmation). Not one, let alone two. Not by a long shot. There is zero confirmation.
And that's just for starters. Could well be short covering, bottom picking, bargain hunting, whatever, for all we know. Who knows. Let's see how it plays out.
Sure, this current swing is tradeable, and many are doing that, but many are also in it for the longer term.
I'm not into tech. indicators at all , but I added RSI to DOW (DJIA, $INDU, whatever, depends on data provider ). You can see it became "overbought" around 10, 11 Nov, 2016 (the most recent ), and so a mechanical SELL signal (DAILY Chart).
Just prior to that SELL signal, was around 18,000, now near 20,000. A false signal, so much for overbought / oversold...11% higher since then. Taking partial profits might well have been prudent, but this is one hell of a bull trend (and S&P 500), since GFC trough of 7/2009, but NOT a classic bubble by any means (as discussed in an earlier Post today, not by any stretch of the imagination, and I've lived thru a few, and so have you, except that I was there, physically, and a participant). It's been a long struggle, nothing like, say 1995- early 2000, let along the vertical rise in 98, 99 on NASDAQ. QCOM - a great company (which I held) - rose 2,614% in 1999! That's not normal.
http://www.nytimes.com/2000/01/03/b...99-extraordinary-winners-and-more-losers.html
I also Posted an article on exactly this for martis (on bubbles).
For the record, the WEEKLY (second image, below) indicates "overbought" late Nov, and still rose another 5%.
DOW - DAILY, with RSI at
bottom of chart. Over 70 is "overbought".
DOW - WEEKLY - with RSI at bottom of chart. Over 70 is "overbought".
Certainly not "extremely overbought", at 72, and WEEKLY always over-rides DAILY (L/Term over-rides shorter term...always)
