Hot Tamales

I was messing around with my McClellan Oscillator chart, much like I did a few months ago: MO Rocca. In that post I was observing the flattening of the MAs with some triggers to help identify tops. This worked very well through much of P2 but it did not work at all with the Feb-Apr rally. ... which was a bummer. Yet I would still keep an eye on it.

I have been using it also to look for divergences. The April down move did not show any divergence through the end of May, which was another reason why I thought we were headed lower sooner than this. But we eventually did get divergence (as shown below), it just took longer than usual to see based on the highly distorted waveforms in May/June/July. But now that we have been in more or less a trading range the last few months and the indicators are calming down again, the MO is starting to show divergence in this move.

And yes, I think it is bearish. We have a wedge forming (I am not a fan of the 1-2, 1-2 up count from early July, especially given the action of the last few days where we should be seeing a 3 explosion up), momentum divergences and some nice divergence on the MO.

I think we will be getting our turn in the next few days.