Thursday 16 February 2012

Divergences Everywhere.

While SPX is making new highs I am seeing divergences everywhere.
1. Price Volume Divergence:
 2. Momentum divergence. Prices up but RSI down.
3. SPX making new high but VIX not making lower low.
4. SPX making new high, but NYSE new highs are falling.
5. SPX making new high, DJ-Transport is diverging.
6. SPX making new high, copper moving down.

I can go on and on but somehow I think a correction is needed to rebalance the too stretched rubber band.

I know liquidity is strong and all Central Bankers are pumping in money, but even then!

Lets see tomorrow. 


  1. Thanks, bb. Good post. Maybe a high on Thursday at the new moon, around 1375-1380 SPX. Double top on AAPL at 525. I don't see a top this week.

  2. Check out around Feb OpEx last year and compare it to our current place. The 2010-11 QE2 push proved to be temporary and was fading about "now" even though it ran on until Jun11. I don't see much reason to think this Fed/ECB QE will be any more permanent.

    Next week should be interesting. If we don't see a big woosh down Tuesday I'll reconsider but it seems to me like we've all been here before. Deja vu.

  3. I agree with you. Next week should sure be interesting.