The Dumbest Word in Investing: Overbought

Friday, March 6, 2026   One of the dumbest things investors say during a bull market is:   "It's overbought."   As if markets care about your oscillator.   As if trends politely stop because someone's RSI hit 70.   Every single time something starts trending, the crowd immediately assumes the move is about to end. It's amazing how consistently wrong that thinking is.   I remember when gold started ripping higher in 2024.   At $2,500 people were already screaming "bubble."   Two thousand five hundred. Think about that for a second.   Gold had just broken out of a four-year base, and people were calling the beginning of a structural move the end of the cycle.   That's not analysis.   That's just the human brain being terrible at thinking long term.   Humans are wired for short-term survival, not long-term trend recognition.   We evolved to react to immediate threats, not identify multi-year macro cycles.   And honestly, I'm not immune to that either.   I'm probably the most in-the-moment person I know.   Yesterday is gone. Tomorrow is uncertain. I focus on what I can control right now.   That's exactly how I trade.   My Process Is Simple   Before I enter a trade I already know three things: • Why I'm in the trade • Where I'm wrong • Where I'm exiting   That's it.   Everything else is noise. Maybe it's a trailing stop.   Maybe it's a break of the 60-day low.   Maybe it's a moving average cross.   Whatever the rule is, I decide it before the trade starts.   Because once you're in the trade your emotions will start trying to rewrite the plan.   And if you don't have rules beforehand, you'll find a thousand reasons to abandon the position the moment volatility shows up.   The Other Thing I Do   And this part is important.   I visualize extremes.   Not predictions. Just possibilities.   What would the world look like if: • Oil traded at $200 • The 30-year treasury yield hit 10% • Commodities massively outperformed financial assets • Energy stocks went through a mania phase   What would the charts look like?   What would the news look like?   What would portfolios look like?   I run those scenarios in my head constantly.   Because if you've already imagined the outcome, you're less shocked when markets move toward it.   Look at Energy     The bottom chart above is the Energy Sector ETF $XLE.   Look at how long that thing went nowhere.   Years of sideways consolidation.   False breakouts.   Failed rallies.   Just frustration.   And now?   It's starting to break higher.   This is exactly what happened with gold.   Gold spent four years consolidating under resistance before it finally broke out in 2024.   Once that level cleared, the move accelerated fast.   That's what strong trends do.   They spend years building pressure… …and then they explode.   So when people tell me energy is "overbought" after a breakout, I laugh.   Because the real move in trends usually happens after the breakout, not before it.   Visualization Matters   Visualization isn't just about markets either. It's about life.   When I was a kid riding BMX, I wasn't the most talented rider.   Not even close.   But I was obsessed.   When other kids were paying attention in school, I was doing something completely different.   I was sitting there drawing ramps in my notebook.   Writing down trick lists.   Planning lines.   Dreaming about the next thing I wanted to land.   One day a teacher grabbed my notebook and saw page after page of ramps and tricks.   He ripped the paper up and told me:   "You need to apply yourself."   What neither of us realized at the time was…   I already was.   Just not in the way school understood.   I was building a muscle that ended up helping me everywhere in life.   The ability to visualize outcomes before they happen.   That Skill Saved Me Later   When I was locked up, that same muscle helped me mentally escape where I was.   I would sit there thinking about the life I was going to build when I got out.   Every injury I had from riding…   I would visualize how much stronger I was going to come back.   Every setback became part of a future story I was already imagining.   I'm Not the Smartest Guy in the Room   I've never believed that.   But I do know where my edge is.   It's in my ability to think differently than most people.   Most people see something go up and assume it must come down.   I see something break out of a massive base and ask:   "What if this is just getting started?"   And that question…   Is where the biggest trades in markets usually begin.     The last time the CBOE made a structural change like this, the traders who caught it early had an edge that lasted years. Steve Strazza is breaking down the January 2026 update and it's completely free to watch.   Replay here Jason Perz | ASC Gold Rush | Save The Bees All Star Charts emails are a financial publication of general circulation and only offers impersonal advice, not tailored to individual needs of a specific client or group. Any comments or statements made herein do not necessarily reflect those of All Star Charts or its affiliates (collectively, "All Star Charts") and do not constitute buy or sell recommendations. Unless specifically indicated, this message is not an official confirmation of any transaction. The contents of any email communications to or from All Star Charts may be monitored or reviewed at All Star Charts's discretion. All Star Charts accepts no responsibility for any loss or damage arising in any way from the use of this transmission and any attachments; it is the responsibility of the recipient to ensure that they are virus free. 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