OVER BOUGHT?

In the news, the Chinese markets are down about 8% and the futures are pointing to a lower open.

Gapping up - DIGE CELG CYCC ICFI SLR PALM NFI CDNS NVT ONXX YMI IMGN WMT; Gapping down- AMLN TELK CTIC CRAY RNVS DAL DNDN.

Briefing.com notes that B of A is out with research on CTSH and INFY noting "shares are trading at less than 1 standard deviation below their average historical next 12 months P/E /growth ratio. They note that in the past, this level has been an excellent point." I am long both and expect some nice gains from these levels.

Now, how overbought are the markets? - witness all the 90+ readings on the 2 day RSI indicators for the major indexes. In addition, check the daily breadth- I have been keeping stats for many years but rarely has the adv/dec line numbers been this strong over a five day period.

How good have they been? On Friday there were 1,112 net gainers on the NYSE, Thursday 589, Wednesday 1,271, Tuesday 885 and Friday May 25 1,304 net for a five day total of 5,161 net green over the last five trading days.

That is very over bought breadth and every one should watch for a reversal as those reading are not sustainable in my opinion.