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Valiant777
2021-07-17
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Valiant777
2021-07-14
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Apple And Amazon Are Leading The Stock Market To Extremely Overbought Levels
Valiant777
2021-07-14
sheessh
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These levels are not all that dissimilar to what was witnessed in August and September of 2020. That period, of course, led to a period of strong volatility through the end of October and ultimately the group's underperformance vs. the S&P 500 for some time.</p>\n<p>Amazon (AMZN) and Apple (AAPL) are two of the stocks leading the charge, and they, too, just like the broader index, are now extremely overbought. This has nothing to do with their long-term fundamental prospect.</p>\n<p>It appears investors continue to dump thereflation tradeand are moving into the technology/growth names as interest rates have fallen. However, this has created severely overheated conditions, which can be seen through technical and options market analysis.</p>\n<p><b>Extremely Overbought</b></p>\n<p>The relative strength index on the NASDAQ 100 ETF is currently above 77. Levels this high on the RSI over time lead to rather steep declines in the NASDAQ 100 ETF. While that doesn't always have to be the case, on at least 4 of the past 6 occasions since 2017, the NASDAQ experienced a 10% pullback or more following the RSI getting to this level. The other two times saw flat price action or a drawdown of around 6%.</p>\n<p><img src=\"https://static.tigerbbs.com/62338c2b12bb90d24d73dd75e14fa44f\" tg-width=\"640\" tg-height=\"423\" referrerpolicy=\"no-referrer\"></p>\n<p>Additionally, there has been an increase in call buying activity in some of the biggest NASDAQ components, such as Apple and Amazon. Each of which has surged to an all-time high in recent days. This appears to have the marking of what is a gamma squeeze. This is when we see a lot of call buying forcing market makers to buy more of the underlying stock, which helps drive the stock price higher. It also results in the market maker raising the implied volatility levels, making buying a call more expensive. This is an effort for the market maker to offset the added risk they are taking; simultaneously, volume tends to slow because the calls become more expensive. Once the options volume slows enough, the market maker is overhedged and then turns around and starts selling the stock.</p>\n<p><b>Apple and Amazon</b></p>\n<p>Call volume has exploded in Apple since the beginning of July, which has helped push the stock price higher. Additionally, it is easy to see that implied volatility levels have been rising with the stock price. This has the characteristics of a gamma squeeze.</p>\n<p><img src=\"https://static.tigerbbs.com/736e128f7b131012600b11986c4b1470\" tg-width=\"640\" tg-height=\"427\" referrerpolicy=\"no-referrer\"></p>\n<p>This can also be witnessed by watching the CBOE VIX on Apple or Amazon. The two stocks have seen a visible rise in their respective VIX reading suggesting that volatility in both has risen sharply. The last time something similar happened was in late August and early September last year, and it marked the end of the two stocks' big moves higher.</p>\n<p><img src=\"https://static.tigerbbs.com/77a8d21628bbec14b39b3c2d316b1005\" tg-width=\"640\" tg-height=\"314\" referrerpolicy=\"no-referrer\"></p>\n<p>Like Apple, Amazon has also seen its call volume explode since the beginning of July.</p>\n<p><img src=\"https://static.tigerbbs.com/4cba6af1f06917c2355a4d09a94f0f03\" tg-width=\"640\" tg-height=\"427\" referrerpolicy=\"no-referrer\"></p>\n<p>Additionally, we have seen both Apple and Amazon reach very overbought levels in the short term. Apple's RSI has reached 81 in recent days, and while it doesn't always lead to a sharp decline in the stock, 4 out of the last 5 times it has gotten this high, it resulted in a decline of 10% or more.</p>\n<p><img src=\"https://static.tigerbbs.com/03e3483f4615a1b1dfb3bcc64256631d\" tg-width=\"640\" tg-height=\"314\" referrerpolicy=\"no-referrer\"></p>\n<p>Like Apple, Amazon has seen its RSI climb to over 77, and like Apple, it doesn't always result in the stock falling sharply. But at least 7 out of the last 8 times the stock's RSI has reached a level this extreme has resulted in a pullback of 10% or more.</p>\n<p><img src=\"https://static.tigerbbs.com/666382d7cd3012f5525983b62d9bf4fa\" tg-width=\"640\" tg-height=\"314\" referrerpolicy=\"no-referrer\"></p>\n<p>Of course, none of this happening is likely a coincidence; in fact, it is probably because this Friday marks the monthly expiration date. This means that the options market is holding the equity market in place right now and helps to offer support to it. Once the options market \"resets\" next week, things could change rather dramatically.</p>\n<p>None of this is to say the market will suffer a pullback immediately, but clearly, the odds appear to be starting to favor that time may be sooner rather than later.</p>","source":"seekingalpha","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Apple And Amazon Are Leading The Stock Market To Extremely Overbought Levels</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nApple And Amazon Are Leading The Stock Market To Extremely Overbought Levels\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-07-14 17:09 GMT+8 <a href=https://seekingalpha.com/article/4439049-apple-and-amazon-are-leading-the-stock-market-to-extremely-overbought-levels><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Summary\n\nThe Nasdaq 100 is now in rarely seen overbought levels.\nThe majority of the time when the index was this overbought a sharp correction followed.\nApple and Amazon appear to be leading the ...</p>\n\n<a href=\"https://seekingalpha.com/article/4439049-apple-and-amazon-are-leading-the-stock-market-to-extremely-overbought-levels\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"AAPL":"苹果","AMZN":"亚马逊"},"source_url":"https://seekingalpha.com/article/4439049-apple-and-amazon-are-leading-the-stock-market-to-extremely-overbought-levels","is_english":true,"share_image_url":"https://static.laohu8.com/5a36db9d73b4222bc376d24ccc48c8a4","article_id":"1160878205","content_text":"Summary\n\nThe Nasdaq 100 is now in rarely seen overbought levels.\nThe majority of the time when the index was this overbought a sharp correction followed.\nApple and Amazon appear to be leading the charge on the latest price movement.\n\nThe Invesco QQQ ETF (QQQ) (NASDAQ 100) and the technology sector, in general, have reached dangerously overbought levels. These levels are not all that dissimilar to what was witnessed in August and September of 2020. That period, of course, led to a period of strong volatility through the end of October and ultimately the group's underperformance vs. the S&P 500 for some time.\nAmazon (AMZN) and Apple (AAPL) are two of the stocks leading the charge, and they, too, just like the broader index, are now extremely overbought. This has nothing to do with their long-term fundamental prospect.\nIt appears investors continue to dump thereflation tradeand are moving into the technology/growth names as interest rates have fallen. However, this has created severely overheated conditions, which can be seen through technical and options market analysis.\nExtremely Overbought\nThe relative strength index on the NASDAQ 100 ETF is currently above 77. Levels this high on the RSI over time lead to rather steep declines in the NASDAQ 100 ETF. While that doesn't always have to be the case, on at least 4 of the past 6 occasions since 2017, the NASDAQ experienced a 10% pullback or more following the RSI getting to this level. The other two times saw flat price action or a drawdown of around 6%.\n\nAdditionally, there has been an increase in call buying activity in some of the biggest NASDAQ components, such as Apple and Amazon. Each of which has surged to an all-time high in recent days. This appears to have the marking of what is a gamma squeeze. This is when we see a lot of call buying forcing market makers to buy more of the underlying stock, which helps drive the stock price higher. It also results in the market maker raising the implied volatility levels, making buying a call more expensive. This is an effort for the market maker to offset the added risk they are taking; simultaneously, volume tends to slow because the calls become more expensive. Once the options volume slows enough, the market maker is overhedged and then turns around and starts selling the stock.\nApple and Amazon\nCall volume has exploded in Apple since the beginning of July, which has helped push the stock price higher. Additionally, it is easy to see that implied volatility levels have been rising with the stock price. This has the characteristics of a gamma squeeze.\n\nThis can also be witnessed by watching the CBOE VIX on Apple or Amazon. The two stocks have seen a visible rise in their respective VIX reading suggesting that volatility in both has risen sharply. The last time something similar happened was in late August and early September last year, and it marked the end of the two stocks' big moves higher.\n\nLike Apple, Amazon has also seen its call volume explode since the beginning of July.\n\nAdditionally, we have seen both Apple and Amazon reach very overbought levels in the short term. Apple's RSI has reached 81 in recent days, and while it doesn't always lead to a sharp decline in the stock, 4 out of the last 5 times it has gotten this high, it resulted in a decline of 10% or more.\n\nLike Apple, Amazon has seen its RSI climb to over 77, and like Apple, it doesn't always result in the stock falling sharply. But at least 7 out of the last 8 times the stock's RSI has reached a level this extreme has resulted in a pullback of 10% or more.\n\nOf course, none of this happening is likely a coincidence; in fact, it is probably because this Friday marks the monthly expiration date. This means that the options market is holding the equity market in place right now and helps to offer support to it. Once the options market \"resets\" next week, things could change rather dramatically.\nNone of this is to say the market will suffer a pullback immediately, but clearly, the odds appear to be starting to favor that time may be sooner rather than later.","news_type":1},"isVote":1,"tweetType":1,"viewCount":117,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":144062085,"gmtCreate":1626254394547,"gmtModify":1631891034093,"author":{"id":"3582254756506480","authorId":"3582254756506480","name":"Valiant777","avatar":"https://static.laohu8.com/default-avatar.jpg","crmLevel":1,"crmLevelSwitch":0,"followedFlag":false,"authorIdStr":"3582254756506480","idStr":"3582254756506480"},"themes":[],"htmlText":"sheessh","listText":"sheessh","text":"sheessh","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://laohu8.com/post/144062085","repostId":"1111797255","repostType":4,"isVote":1,"tweetType":1,"viewCount":707,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0}],"hots":[{"id":179176949,"gmtCreate":1626497799881,"gmtModify":1631891034087,"author":{"id":"3582254756506480","authorId":"3582254756506480","name":"Valiant777","avatar":"https://static.laohu8.com/default-avatar.jpg","crmLevel":1,"crmLevelSwitch":0,"followedFlag":false,"idStr":"3582254756506480","authorIdStr":"3582254756506480"},"themes":[],"htmlText":"gd","listText":"gd","text":"gd","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":2,"commentSize":0,"repostSize":0,"link":"https://laohu8.com/post/179176949","repostId":"1144679332","repostType":4,"isVote":1,"tweetType":1,"viewCount":606,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":144062225,"gmtCreate":1626254458467,"gmtModify":1631891034092,"author":{"id":"3582254756506480","authorId":"3582254756506480","name":"Valiant777","avatar":"https://static.laohu8.com/default-avatar.jpg","crmLevel":1,"crmLevelSwitch":0,"followedFlag":false,"idStr":"3582254756506480","authorIdStr":"3582254756506480"},"themes":[],"htmlText":"z","listText":"z","text":"z","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://laohu8.com/post/144062225","repostId":"1160878205","repostType":4,"repost":{"id":"1160878205","kind":"news","pubTimestamp":1626253788,"share":"https://www.laohu8.com/m/news/1160878205?lang=&edition=full","pubTime":"2021-07-14 17:09","market":"us","language":"en","title":"Apple And Amazon Are Leading The Stock Market To Extremely Overbought Levels","url":"https://stock-news.laohu8.com/highlight/detail?id=1160878205","media":"seekingalpha","summary":"Summary\n\nThe Nasdaq 100 is now in rarely seen overbought levels.\nThe majority of the time when the i","content":"<p><b>Summary</b></p>\n<ul>\n <li>The Nasdaq 100 is now in rarely seen overbought levels.</li>\n <li>The majority of the time when the index was this overbought a sharp correction followed.</li>\n <li>Apple and Amazon appear to be leading the charge on the latest price movement.</li>\n</ul>\n<p>The Invesco QQQ ETF (QQQ) (NASDAQ 100) and the technology sector, in general, have reached dangerously overbought levels. These levels are not all that dissimilar to what was witnessed in August and September of 2020. That period, of course, led to a period of strong volatility through the end of October and ultimately the group's underperformance vs. the S&P 500 for some time.</p>\n<p>Amazon (AMZN) and Apple (AAPL) are two of the stocks leading the charge, and they, too, just like the broader index, are now extremely overbought. This has nothing to do with their long-term fundamental prospect.</p>\n<p>It appears investors continue to dump thereflation tradeand are moving into the technology/growth names as interest rates have fallen. However, this has created severely overheated conditions, which can be seen through technical and options market analysis.</p>\n<p><b>Extremely Overbought</b></p>\n<p>The relative strength index on the NASDAQ 100 ETF is currently above 77. Levels this high on the RSI over time lead to rather steep declines in the NASDAQ 100 ETF. While that doesn't always have to be the case, on at least 4 of the past 6 occasions since 2017, the NASDAQ experienced a 10% pullback or more following the RSI getting to this level. The other two times saw flat price action or a drawdown of around 6%.</p>\n<p><img src=\"https://static.tigerbbs.com/62338c2b12bb90d24d73dd75e14fa44f\" tg-width=\"640\" tg-height=\"423\" referrerpolicy=\"no-referrer\"></p>\n<p>Additionally, there has been an increase in call buying activity in some of the biggest NASDAQ components, such as Apple and Amazon. Each of which has surged to an all-time high in recent days. This appears to have the marking of what is a gamma squeeze. This is when we see a lot of call buying forcing market makers to buy more of the underlying stock, which helps drive the stock price higher. It also results in the market maker raising the implied volatility levels, making buying a call more expensive. This is an effort for the market maker to offset the added risk they are taking; simultaneously, volume tends to slow because the calls become more expensive. Once the options volume slows enough, the market maker is overhedged and then turns around and starts selling the stock.</p>\n<p><b>Apple and Amazon</b></p>\n<p>Call volume has exploded in Apple since the beginning of July, which has helped push the stock price higher. Additionally, it is easy to see that implied volatility levels have been rising with the stock price. This has the characteristics of a gamma squeeze.</p>\n<p><img src=\"https://static.tigerbbs.com/736e128f7b131012600b11986c4b1470\" tg-width=\"640\" tg-height=\"427\" referrerpolicy=\"no-referrer\"></p>\n<p>This can also be witnessed by watching the CBOE VIX on Apple or Amazon. The two stocks have seen a visible rise in their respective VIX reading suggesting that volatility in both has risen sharply. The last time something similar happened was in late August and early September last year, and it marked the end of the two stocks' big moves higher.</p>\n<p><img src=\"https://static.tigerbbs.com/77a8d21628bbec14b39b3c2d316b1005\" tg-width=\"640\" tg-height=\"314\" referrerpolicy=\"no-referrer\"></p>\n<p>Like Apple, Amazon has also seen its call volume explode since the beginning of July.</p>\n<p><img src=\"https://static.tigerbbs.com/4cba6af1f06917c2355a4d09a94f0f03\" tg-width=\"640\" tg-height=\"427\" referrerpolicy=\"no-referrer\"></p>\n<p>Additionally, we have seen both Apple and Amazon reach very overbought levels in the short term. Apple's RSI has reached 81 in recent days, and while it doesn't always lead to a sharp decline in the stock, 4 out of the last 5 times it has gotten this high, it resulted in a decline of 10% or more.</p>\n<p><img src=\"https://static.tigerbbs.com/03e3483f4615a1b1dfb3bcc64256631d\" tg-width=\"640\" tg-height=\"314\" referrerpolicy=\"no-referrer\"></p>\n<p>Like Apple, Amazon has seen its RSI climb to over 77, and like Apple, it doesn't always result in the stock falling sharply. But at least 7 out of the last 8 times the stock's RSI has reached a level this extreme has resulted in a pullback of 10% or more.</p>\n<p><img src=\"https://static.tigerbbs.com/666382d7cd3012f5525983b62d9bf4fa\" tg-width=\"640\" tg-height=\"314\" referrerpolicy=\"no-referrer\"></p>\n<p>Of course, none of this happening is likely a coincidence; in fact, it is probably because this Friday marks the monthly expiration date. This means that the options market is holding the equity market in place right now and helps to offer support to it. Once the options market \"resets\" next week, things could change rather dramatically.</p>\n<p>None of this is to say the market will suffer a pullback immediately, but clearly, the odds appear to be starting to favor that time may be sooner rather than later.</p>","source":"seekingalpha","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Apple And Amazon Are Leading The Stock Market To Extremely Overbought Levels</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nApple And Amazon Are Leading The Stock Market To Extremely Overbought Levels\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-07-14 17:09 GMT+8 <a href=https://seekingalpha.com/article/4439049-apple-and-amazon-are-leading-the-stock-market-to-extremely-overbought-levels><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Summary\n\nThe Nasdaq 100 is now in rarely seen overbought levels.\nThe majority of the time when the index was this overbought a sharp correction followed.\nApple and Amazon appear to be leading the ...</p>\n\n<a href=\"https://seekingalpha.com/article/4439049-apple-and-amazon-are-leading-the-stock-market-to-extremely-overbought-levels\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"AAPL":"苹果","AMZN":"亚马逊"},"source_url":"https://seekingalpha.com/article/4439049-apple-and-amazon-are-leading-the-stock-market-to-extremely-overbought-levels","is_english":true,"share_image_url":"https://static.laohu8.com/5a36db9d73b4222bc376d24ccc48c8a4","article_id":"1160878205","content_text":"Summary\n\nThe Nasdaq 100 is now in rarely seen overbought levels.\nThe majority of the time when the index was this overbought a sharp correction followed.\nApple and Amazon appear to be leading the charge on the latest price movement.\n\nThe Invesco QQQ ETF (QQQ) (NASDAQ 100) and the technology sector, in general, have reached dangerously overbought levels. These levels are not all that dissimilar to what was witnessed in August and September of 2020. That period, of course, led to a period of strong volatility through the end of October and ultimately the group's underperformance vs. the S&P 500 for some time.\nAmazon (AMZN) and Apple (AAPL) are two of the stocks leading the charge, and they, too, just like the broader index, are now extremely overbought. This has nothing to do with their long-term fundamental prospect.\nIt appears investors continue to dump thereflation tradeand are moving into the technology/growth names as interest rates have fallen. However, this has created severely overheated conditions, which can be seen through technical and options market analysis.\nExtremely Overbought\nThe relative strength index on the NASDAQ 100 ETF is currently above 77. Levels this high on the RSI over time lead to rather steep declines in the NASDAQ 100 ETF. While that doesn't always have to be the case, on at least 4 of the past 6 occasions since 2017, the NASDAQ experienced a 10% pullback or more following the RSI getting to this level. The other two times saw flat price action or a drawdown of around 6%.\n\nAdditionally, there has been an increase in call buying activity in some of the biggest NASDAQ components, such as Apple and Amazon. Each of which has surged to an all-time high in recent days. This appears to have the marking of what is a gamma squeeze. This is when we see a lot of call buying forcing market makers to buy more of the underlying stock, which helps drive the stock price higher. It also results in the market maker raising the implied volatility levels, making buying a call more expensive. This is an effort for the market maker to offset the added risk they are taking; simultaneously, volume tends to slow because the calls become more expensive. Once the options volume slows enough, the market maker is overhedged and then turns around and starts selling the stock.\nApple and Amazon\nCall volume has exploded in Apple since the beginning of July, which has helped push the stock price higher. Additionally, it is easy to see that implied volatility levels have been rising with the stock price. This has the characteristics of a gamma squeeze.\n\nThis can also be witnessed by watching the CBOE VIX on Apple or Amazon. The two stocks have seen a visible rise in their respective VIX reading suggesting that volatility in both has risen sharply. The last time something similar happened was in late August and early September last year, and it marked the end of the two stocks' big moves higher.\n\nLike Apple, Amazon has also seen its call volume explode since the beginning of July.\n\nAdditionally, we have seen both Apple and Amazon reach very overbought levels in the short term. Apple's RSI has reached 81 in recent days, and while it doesn't always lead to a sharp decline in the stock, 4 out of the last 5 times it has gotten this high, it resulted in a decline of 10% or more.\n\nLike Apple, Amazon has seen its RSI climb to over 77, and like Apple, it doesn't always result in the stock falling sharply. But at least 7 out of the last 8 times the stock's RSI has reached a level this extreme has resulted in a pullback of 10% or more.\n\nOf course, none of this happening is likely a coincidence; in fact, it is probably because this Friday marks the monthly expiration date. This means that the options market is holding the equity market in place right now and helps to offer support to it. Once the options market \"resets\" next week, things could change rather dramatically.\nNone of this is to say the market will suffer a pullback immediately, but clearly, the odds appear to be starting to favor that time may be sooner rather than later.","news_type":1},"isVote":1,"tweetType":1,"viewCount":117,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":144062085,"gmtCreate":1626254394547,"gmtModify":1631891034093,"author":{"id":"3582254756506480","authorId":"3582254756506480","name":"Valiant777","avatar":"https://static.laohu8.com/default-avatar.jpg","crmLevel":1,"crmLevelSwitch":0,"followedFlag":false,"idStr":"3582254756506480","authorIdStr":"3582254756506480"},"themes":[],"htmlText":"sheessh","listText":"sheessh","text":"sheessh","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://laohu8.com/post/144062085","repostId":"1111797255","repostType":4,"isVote":1,"tweetType":1,"viewCount":707,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0}],"lives":[]}