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, May 16, 2012

May 16

My 60-minute system is displaying some crazy divergences. They are as severe as they were on the Nov 2011 and Dec 2011 pullbacks.

But a divergence by itself won't say when a pullback is done. So I am looking for other data to see if we are near anything important. Here is one view on the Daily chart. We are at a breakout retest line at a 38% retrace with oversold short term conditions.

The next view is a long term weekly chart looking at lateral support 'strata'. And it looks to me that this pullback is moving right into a zone that is consolidating the breakout.

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