Here's the latest 5 min chart where you can see not only 3C in a negative divergence, but also Worden's Time Segmented Volume and Money Stream-none of which will follow prices higher.
We also have a tick index divergence
Monday, August 9, 2010
Another Update
So far, we do have higher prices in the SPY into a volume surge in all of the averages. There's one positive divergence in the DIA and one in the SPY at 1:30-ish, but there's also a big volume spike there as well. I think 3C is reacting to the volume spike as the divergence can only be found on the 1 min chart. The 5 min charts remain negative and some getting even worse into new low leading divergences. Whether this is dumb money or was a smart money kick start, I'm not sure, but the longer term charts suggest that this is not being accumulated, at least not in the typical fashion. I think it is a reaction to the Fed meeting tomorrow with expectations from main street perhaps being divergent from Wall Street expectations, but if you are an institutional seller/short seller, as with any seller, higher prices are exactly what you want to distribute into, thus the distribution must be carried out skillfully as to not flood the market with supply and kill the move.
Here's the latest 5 min chart where you can see not only 3C in a negative divergence, but also Worden's Time Segmented Volume and Money Stream-none of which will follow prices higher.
Here's the latest 5 min chart where you can see not only 3C in a negative divergence, but also Worden's Time Segmented Volume and Money Stream-none of which will follow prices higher.
2 comments:
San Fransico Fed is out warning of "significant possibility" of a 2nd recession in the next couple of years, but definitly not in the next couple of months...wonder when we exited the first as it still hasn't been declared yet.
Technically speaking a recession is considered two consecutive quarters of negative GDP, so "technically" we are not in recession. Of course try telling that to any of the millions of unemployed or small business owners.
It is interesting though how quickly and obviously the Fed, which is pretty news-leak resilient, is out to lower the bar and keeps lowering it. Taking into consideration last night's analysis, it seems to me they may be very aware that a sell-off is coming and want to avoid the same crash we saw in 2008 that left banks under-funded and therefore in hot water with the treasury, caused collapses in all kinds of investment brokers, etc and what it may do to pension funds. They may be on a PR campaign to "slowly boil the frog" and keep the market in an "orderly" sell-off. It's a possibility, this news has been leaking since Bernanke was in front of the Senate a few weeks back.
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