“Overbought can become more overbought” (Wall Street adage)

“Overbought can become more overbought” (or “overbought can stay overbought”) is a Wall Street adage. If people are still buying, then it might still be time to buy. “Oversold can easily become more oversold and overbought can easily become more overbought” was cited in print in 2002. “What is overbought can stay overbought” was cited in 2003.
 
“Oversold can become more oversold” is a similar adage.
       
 
Aktienboard
Swingle
08.11.2002, 18:57
Oversold can easily become more oversold and overbought can easily become more overbought .
 
AIQ Systems—Opening Bell Newsletter (September 2003)
Day Trading the Stochastic Pop
‘What Is Overbought Can Stay
Overbought’ – This Alternative Approach
To the Stochastic Indicator Works!
By David Vomund
(...)
Jake Bernstein created an alternative approach to the interpretation of the stochastic indicator. He observed that what is overbought can stay overbought. He was correct. Using an approach he termed the “Stochastic Pop,” you establish a long position when the stochastic enters overbought territory. In other words, you enter just when most traders consider the security to be overbought and incapable of going higher. According to Mr. Bernstein, once the stochastic hits an overbought level, the security tends to POP like a kernel of corn at the right temperature.
       
Google Books
Technical Analysis Demystified:
A Self-Teaching Guide
By Constance Brown
New York, NY: McGraw Hill Professional
2007
Pg. 211:
Oversold can get considerably more oversold and vice versa.
   
Google Books
A Beginner’s Guide to Short Term Trading:
Maximize Your Profits in 3 Days to 3 Weeks
By Toni Turner
Avon, MA: Adams Media
2008
Pg. 186:
However, in this instance, a still-strong OBV reading and an overbought RSI (remember, overbought can stay overbought) make for a tougher call for shorts and would be considered a more advanced position.
 
Google Books
Stock Selection for Independent Investors
By J. Todd Krajniak
Indianpolis, IN: Dog Ear Publishing
2008
Pg. 65:
There is an old adage that a stock which is overbought can stay overbought. That’s because the folks who realize a company that is priced at $3 with a .5 price to book ratio may have just received a patent on revolutionary technology that will eventually drive the value of the stock to 10 times price to book.
 
Twitter
flool
‏@flool
Overbought market. So what? Overbought can become even more overbought. Useless indicators.
2:19 AM - 20 Jul 2008
 
Forex Factory
Alex K
Sep 24, 2009 8:46pm | Post# 114
Stochastic POP
The colored bar indicator has been useful. I had been finding people to help me code MTF stochastic for quite some time and i am glad to be able to find it here.
 
Ok about Spudfyre his method does not short when market is overbought neither does he long when it is oversold. He simply longs when all the 4 time frame stochastic is sloping up and not overbought and short when all the 4 time frame stochastic is sloping down and not oversold.
 
Easy to understand?
There is a reason why people do not short when it is overbought because market is not rational,what is overbought can be even more overbought,same is true for reverse.
 
Twitter
Chess
‏@chessNwine
$$ Don’t forget that just as overbought stayed overbought on the upside, oversold can stay oversold on the downside too. Respect the trend.
1:20 PM - 4 May 2010
   
Twitter
tradingpoints
‏@tradingpoints
$DAX overbought can become overbought-er.
6:54 AM - 20 Mar 2015