04/15/2009 Market Recap: Beware of Negative Divergences


Cobra's Market View Private Messaging System shows:


  Trend Momentum Comments - Sample for using the trend table. Warning: This is NOT a trading recommendation!
Long-term Down   Idea for trading intermediate-term under primary down trend.
Intermediate Up Overbought Beware of $NYA50R which usually means a top
Short-term Up Neutral May need take profit if further up tomorrow
Report Focused On Buyable dip or the market topped?
Today’s Summary Pay attention to the rising CPC.
Too many negative divergences.

Negative divergence, as I’ve been saying, is only a warning not a trigger of action.  However, there are too many negative divergences now which are too obvious to be ignored, therefore I strongly suggest everyone acting cautiously. The bottom line, besides NYA50R, I have not seen any other intermediate term market topping signals, so it’s still possible that the market could go further up.  But before that, I believe a decent pullback will happen.

7.0.2 SPX and CPC Divergence Watch, this is what you should pay attention to tomorrow.  If the market rises and CPC goes up at the same time, it’s prudent to take profit as it’s very likely the market may pullback on Friday.

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1.0.2 S&P 500 SPDRs (SPY 60 min).  Bearish rising wedge plus a lot of negative divergence, this chart looks very bearish to me.

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0.0.3 SPX Intermediate-term Trading Signals, 1.1.4 Nasdaq 100 Index Intermediate-term Trading Signals.  NYMO and NYA50R are put in the same chart for your convenience.  You can see how the market is overbought in the intermediate term, and how significant the negative divergence is.

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1.3.7 Russell 3000 Dominant Price-Volume Relationships, 1470 stocks price up volume down, this is a quite bearish reading.

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Lastly take a look at smart Money / Dumb Money Confidence, courtesy of www.sentimentrader.com, period.

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