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Saturday, June 24, 2017 12:33:03 PM
SPY Weekly Wrap -- Troubling Negative Divergences
By Carl Swenlin | June 24, 2017
SPY began the week with a breakout on very high volume that subsequently looks like a minor blowoff, as price retreated back into the June trading range. The expansion of New Highs on Monday failed to match the climactic level of New Highs on June 2, and a PMO top implies that we could be in for more churning, and maybe a bit of a decline.
STOCKS
IT Trend Model: BUY as of 11/15/2016
LT Trend Model: BUY as of 4/1/2016
The SPY daily PMO crossed down through its signal line this week, an event that we interpret negatively. Being in a bull market means that any resulting correction will probably be small, and that sideways movement may be the worst of it. Price is still well above the bull market trend line, so that excess needs to be relieved somewhat. Also, OBV is diverging negatively across the price tops in June.
The weekly PMO is overbought and has been fluttering since April, and this means that the rate-of-change has been steady -- not accelerating or decelerating.
Short-Term Market Indicators: In this time frame the indicators are neutral to slightly oversold, and combined with the PMO top, lower prices are indicated. Note the negative divergences.
Intermediate-Term Market Indicators: In this time frame indicators are overbought, and there are significant negative divergences.
Conclusion: Last week I said: "Our primary short- and intermediate-term indicators are looking dismal, and my assumption is that at the very least the sideways churning will continue for another week or two. Considering the difficulties in the technology sector, the consolidation could morph into a correction rather quickly." I think the same conclusion applies this week. Price popped on Monday, then it slid back into the June trading range, so the consolidation continued as expected. We're still in a situation where people could be surprised to the downside. . .
http://stockcharts.com/articles/decisionpoint/2017/06/decisionpoint-weekly-wrap----troubling-negative-divergences.html
• DiscoverGold
Click on "In reply to", for Authors past commentaries
By Carl Swenlin | June 24, 2017
SPY began the week with a breakout on very high volume that subsequently looks like a minor blowoff, as price retreated back into the June trading range. The expansion of New Highs on Monday failed to match the climactic level of New Highs on June 2, and a PMO top implies that we could be in for more churning, and maybe a bit of a decline.
STOCKS
IT Trend Model: BUY as of 11/15/2016
LT Trend Model: BUY as of 4/1/2016
The SPY daily PMO crossed down through its signal line this week, an event that we interpret negatively. Being in a bull market means that any resulting correction will probably be small, and that sideways movement may be the worst of it. Price is still well above the bull market trend line, so that excess needs to be relieved somewhat. Also, OBV is diverging negatively across the price tops in June.
The weekly PMO is overbought and has been fluttering since April, and this means that the rate-of-change has been steady -- not accelerating or decelerating.
Short-Term Market Indicators: In this time frame the indicators are neutral to slightly oversold, and combined with the PMO top, lower prices are indicated. Note the negative divergences.
Intermediate-Term Market Indicators: In this time frame indicators are overbought, and there are significant negative divergences.
Conclusion: Last week I said: "Our primary short- and intermediate-term indicators are looking dismal, and my assumption is that at the very least the sideways churning will continue for another week or two. Considering the difficulties in the technology sector, the consolidation could morph into a correction rather quickly." I think the same conclusion applies this week. Price popped on Monday, then it slid back into the June trading range, so the consolidation continued as expected. We're still in a situation where people could be surprised to the downside. . .
http://stockcharts.com/articles/decisionpoint/2017/06/decisionpoint-weekly-wrap----troubling-negative-divergences.html
• DiscoverGold
Click on "In reply to", for Authors past commentaries
Information posted to this board is not meant to suggest any specific action, but to point out the technical signs that can help our readers make their own specific decisions. Your Due Dilegence is a must!
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