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

Saturday, November 10, 2012

Nov 10

Here is another look at an indicator that is saying that the 'potential' for an Intermediate Degree pullback has been confirmed. I often look at PPO movements (see this post for why PPO is a superior indicator to MACD) movements on a couple of different timeframes. I like 14,30,10 as a 'fast' PPO indicator (I think the default 12,26,9 is too fast) for finding bottoms and I like 34,89,21 as a 'slow' PPO indicator for finding tops. Looking for confirmed divergences often givens you insight as to what is happening. And the wave up since the 2011 has now formed such a divergence on the slow PPO on the Daily chart.

Combined with the recent 60-min, Daily and now Weekly sell signals from my Trend System, I think the market is at risk for an Intermediate Degree correction. The more I study the charts this weekend, the more realistic I think that possibility is becoming.

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