Here you can see the negative divergence in the DIA, I use this because it seems like the action is in the quality names as the IWM is severely underperforming and even the Q's have hit resistance. There's a clear uptrend there on the 1 minute chart, clearly the DIA is starting to trade in the lower end of that channel with two negative divergences and a TRIN Index reading of .65 which is quite a bit under the Overbought position around .70-.75-even though it started the day in a near neutral position. These all point to a probable reversal tomorrow and today is almost a template of exactly how the market has been trading on up-days, a big retail push in the a.m., institutional selling throughout an early-to mid afternoon trading range and then a move higher toward the close.
This all wreaks of volatility plays in which Wall Street takes money from people who chase the big move up or down and then it reveres the next day and they get out as the moves are quite volatile. this is top behavior, but in a micro environment. Lets see where it closes and how it acts in the last 10 minutes or so when the professionals will step in to close the market.
****UPDATE In addition, the VIX which trades the opposite direction of the market and calls reversals at extremes is now trading down to 3 month lows.
2 comments:
Saw and almost bought some, but am sitting on my remaining 25% until this this gets more confirmation of a downtrend.
That's a smart way to play it-confirmation!
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