Friday, May 11, 2012

Early signal?

The DIA as mentioned the last several days was the worst 3C performer and had some ground to make up, it has held pretty well here at this resistance zone which I think is a little psychological test of the shorts and the momentum crowd as mentioned before. The Q's seem like they are the first to start working on a positive signal at the resistance zone.

 While the DIA has a relative negative divergence (the weaker of the two), it has held here better than any other average.

The QQQ showed a stronger negative divergence, but now looks to be starting a leading positive divergence, if this continues to build and we see it in the other averages, then it' likely they'r getting ready to push the market through resistance which will have consequences for the shorts as it is the momentum chasers that are being run out of their positions now and the shorts emboldened.

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