Despite the market making new highs breadth is diverging badly. Aka the market is being driven higher by fewer and fewer stocks. When this starts to happen late in the daily cycle a correction isn't far away.
We now have a large divergence in the McClellan oscillator.
If we happen to see a down day today the slower 10 day moving average will turn down and join the faster 5 day average on the new high/ new low chart. Granted that doesn't always lead to a correction but when it happens late in the daily cycle it's a pretty reliable sell signal.
We are now late enough in the daily cycle that these warning signs should probably be taken seriously. It's probably too late to continue pressing the long side. To do so one risks getting caught in the down draft when the correction begins.
And if you look at IBM and AAPL , they came out with good earnings last night and the old sell the news was strongly in force. AAPL is down $12-$14 pre-mkt and IBM quite a bit too...nice call again Toby/Gary
ReplyDeleteNow that miners have broken their supports, how far do you think they can drop? HUI at 496. SMA 200?
ReplyDeleteEri,
ReplyDeleteDon't get tangled up in technicals. The bull is going to mangle all the technicals in the attempt to shake off riders.
The bottom line is that before this is over the HUI will be many percentage points higher than where it was last week.
I do. I'm going over that in tonight's report.
ReplyDeleteI'm going over that in tonight's report.
ReplyDelete