I analyze macroeconomic issues from a fundamental perspective, and I analyze market behavior from a technical perspective. Original macroeconomic analysis can be found here and both macro analysis and commentary can be found on my Caps blog. If you like or appreciate my analysis, please add yourself to my Following List

Wednesday, August 11, 2010


Here be me reasons for thinkin this wave be done.

..... [alright Captain binv, let's lay off the pirate talk, okay?]

fine (sobbing into his Rum)

Exhibit 1 -- The VIX. Has been putting in a bottoming stance complete with positive divergence for several weeks. Today marks a downtrend breakout.

Exhibit 2 -- the McClellan Oscillator. Has been diverging for a couple weeks as well. This is very common before a trend change.

Exhibit 3 -- Decisive trend breaks on *ALL* the major US indices. See highlights in yellow.

Exhibits 4 and 5 -- Major indices either flirting with or trading back below major moving averages.

Exhibit 6 -- It just "looks done". Clear break out of the wedge accompanied by some serious negative divergence on a 60 minute chart.


So could this be a fakeout? Yep
Could we trade higher? Yep

This market has been eating bears alive for months. But the fact that all of this behavior is confirmed across so many indices means that I think that this is not simply a 'B wave' down or some short term trend change (Minute degree or lower).

This (to me at any rate) has the earmarks of a Minor Degree trend change.

.... Arrrrr :)
blog comments powered by Disqus