These are probably the charts that have kept many of us short and still others entering shorts as the media , the blogs and the general consensus was that we were entering a new bull market. The longer term the chart and the longer and deeper the divergence, the worse the reaction will be on the reversal.
IWM 30 min is hitting new leading negative lows, far below the accumulation area that started the rally and this with the IWM still, even as of today up 18.5%. This would suggest that as the market went higher and perhaps higher then even smart money was prepared for, that they shorted more and more in to strength.
QQQ 60 min also hitting new leading negative lows. As I have said, I haven't seen the averages look this bad in probably years on these charts.
DIA 60 min has been a laggard since early on in the rally, it also made a huge leading negative divergence to the far left before the market crashed.
SPY 30 min is hitting new leading negative lows.
As of the European close, credit which almost always leads the market (except for this last rally for reasons I have explained due to EU bank repatriation of capital from selling $USD denominated assets on orders to recapitalize at the very worst time) took a nose dive in Europe and is doing so now in the US.
I don't think any bounce, if we even get that today, will last too long.
No comments:
Post a Comment