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The stock market just flashed a dangerous warning signal

October 9, 2017

For months, stock market pessimists have been saying that US equities are overvalued.

And as of this past week, they have a major piece of tangible evidence.

The measure in question is the so-called relative strength indicator (RSI), which indicates when the stock market has gotten too stretched in either direction. When the measure exceeds 70, that means it’s overbought, and a downturn may be imminent. Meanwhile, a drop below 30 for the RSI indicates an oversold condition.

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