Yesterday I stated that the market was strong and this is true from a price and volume standpoint. But the Nasdaq and NYSE Summation Index 10 day moving averages have rolled over and are not making new highs with price. This is a divergence to be aware of.
The Advance minus Decline metrics are moving toward overbought. This posture will allow several more days of stock moving higher. But it does not guarantee it. I would expect this metric to be higher considering price is making new highs each day. The internal strength of the market is not matching price which is much stronger.
Charts courtesy of Stockcharts.com
There were way too many bears around .. have not been hearing any of their voices much more lately. The divergences can go on for another 2-3 weeks.
The only indicator I trust would be the one that tells me that buyers are exhausted.. and since it does not exist (at least for the public, maybe goldman got it) … I can only guess that divergences are telling me we are getting close. I am not sure I can spot the buying panic that will tell me exhaustion happened, Has it or is it still to come?
Ray – Short interest is lower than it has been in quite a while. Not much “doin” for all the “talkin”.
I did some Elliot wave counting and timing of my own on SPX, and I come up with this week where top will happen.
I got wave A going from March 6th lows to June 11th, wave B correcting from June 11th to July 8th, and wave C should be concluding tomorrow. I am thinking all of this is 3 corective wave to the 5 wave down starting October 2007.
regards,
r
Ray – sounds about right to me.