A Bullish Divergence!

For the last two weeks, I have been discussing the bearish divergence in the Indices, suggesting we were going to see some type of countertrend rotation to the rally. That eventually occurred on May 14 and continued through today. However, today, both market breadth and net volume increased, as price declined. In other words, the internals were stronger than Friday, but price was lower. This suggests an internal strengthening. It also makes tomorrow extremely important. If there is a continuation of the internals strengthening, then this correction may be over. If not, we will likely see lower prices and the bullish divergence of today eliminated.

Leave a Reply

Your email address will not be published. Required fields are marked *