The Relative Strength Index (RSI, defined as a non trending indicator that measures the momentum of a security to determine whether it is in an overbought or oversold condition according to Bloomberg) of the NDX is at the highest level since Oct ’07. RSI is just a snapshot perspective of a particular move and doesn’t specifically ring a bell at a certain level as overbought can get more overbought and vice versa, before a trend reversal takes place so take this as just an indicator of the strength of this rally rather than as a sell signal. It does though tell you that the risk reward in the very short term becomes more skewed in favor of risk and less of reward. The NDX of course is now up 12 straight days.
