Tuesday, September 14, 2010

Big divergence this morning

I'm seeing big divergence between the ticks and the other internals. Cumulative and adjusted ticks are trending straight down but breadth and A/D lines are coming in very strong. I always use the ticks as an leading indicator as it foretells that institutions remain the better sellers today. Perhaps a reversal is not too far off as the market has been amazingly strong (eg. 6 upside gaps in a row that have not filled now - this has not happened before). I think what we have witnessed was short covering rally that has fuelled this market. For us to remain bullish in the longer term, I'd have to see if it can take out 1150 on the ES.

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