Posts Tagged ‘negative divergences’

NEGATIVE DIVERGENCES ABOUND

NEGATIVE DIVERGENCES ABOUND

Courtesy of The Pragmatic Capitalist

This week’s technical outlook comes courtesy of Decision Point:

While the S&P 500 had managed to squeeze slightly above the ascending wedge that has contained the index for several months, this week it dropped back below the support and it is currently challenging the bottom of the wedge. The wedge has not resolved decisively in either direction, and it is possible that there will be no clear resolution. By that I mean the wedge is so narrow that the price index could continue to drift higher, lower, or sideways to where it will have exited the wedge without a clear resolution. If so, we will ignore the wedge and look for something else to provide some clarity.

I am still of the opinion that we will see some kind of downside correction because of the abundance of negative divergences to be found on our indicator charts. The first is the gradually contracting volume seen on the chart below.

dp1 NEGATIVE DIVERGENCES ABOUND

The next chart shows the three indicators of our OBV (On-Balance Volume) suite with divergences clearly marked.

dp2 NEGATIVE DIVERGENCES ABOUND

Finally, we have the new highs and new lows chart. Again, you can see the negative divergence over the contraction of new highs; however, this chart gives us reason to believe that the internal problems may not be too serious. Note that there have been virtually no new lows for many months, and, without an expansion of new lows, all the negative divergences we are seeing probably have no long-term significance. For example, note that the contraction of new highs at the end of 2007 was accompanied by a considerable expansion of new lows that gave warning of much greater than normal weakness.

dp3 NEGATIVE DIVERGENCES ABOUND

Bottom Line: The abundance of negative divergences keeps waving the caution flag for a correction; however, the complete lack of new lows indicates that we are only witnessing cyclical weakness during an ongoing bull market, not a major top.

 


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Phil's Favorites

The fossil fuel era is coming to an end, but the lawsuits are just beginning

 

The fossil fuel era is coming to an end, but the lawsuits are just beginning

A coal mine near the mountains in Alberta. (Shutterstock)

Courtesy of Kyla Tienhaara, Queen's University, Ontario

“Coal is dead.”

These are not the words of a Greenpeace activist or left-wing politician, but of Jim Barry, the global head of the infrastructure investment group at Blackrock — the world’s largest asset manager. Barry made this statement in 2017, but ...



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Zero Hedge

As Markets Brace For Recession, Illinois Is Nation's Least Prepared

Courtesy of ZeroHedge. View original post here.

Submitted by Ted Dabrowski of WirePoints

Wall Street’s best predictor of a recession has reared its ugly head and Illinois is nowhere near ready for a slowdown. In fact, Illinois is the nation’s least-prepared state for an economic downturn. When that recession finally comes, Illinoisans should expect to get hit hard.

The pre...



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Kimble Charting Solutions

Connect Series Webinar December 2018

Courtesy of Chris Kimble.

We cover dominating patterns in major global Indices, sectors, commodities and the metals markets.  We produce chart pattern analysis and empower people to improve entry and exit points.

To become a member of Kimble Charting Solutions, click here.

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Biotech

China's win-at-all-costs approach suggests it will follow its own dangerous path in biomedicine

Reminder: We are available to chat with Members, comments are found below each post.

 

China's win-at-all-costs approach suggests it will follow its own dangerous path in biomedicine

Megacity Shenzhen, as seen from Hong Kong, is a center for Chinese finance and tech. AP Photo/Kin Cheung

Courtesy of Hallam Stevens, Nanyang Technological University

The world was shocked by ...



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Insider Scoop

Wells Fargo Is Bullish On Shopify

Courtesy of Benzinga.

Related SHOP Benzinga's Top Upgrades, Downgrades For December 18, 2018 41 Biggest Movers From Friday ...

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Chart School

Weekly Market Recap Dec 16, 2018

Courtesy of Blain.

A significant selloff Friday had bears continuing to enjoy December and calls for the bulls for the Federal Reserve to save them.  It’s been a very long time since bears have had the upper hand for such an extended period.  Volatility continues to be very high and the charts continue to say “remain in safety”.  The Russell 2000 – the laggard of 2018 – broke a yearly low set in February and the S&P 500 broke October lows to create a “lower low”.

Karyn Cavanaugh, senior market strategist with Voya Investment Management, said that disappointing economic data out of China was the biggest driver of Friday’s losses. “The Chinese data was a dirt sandwich, not because it showed deceleration in the Chinese economy, but because it’s showing...



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Digital Currencies

Crypto Bull Tom Lee: Bitcoin's 'Fair Value' Closer To $15,000, But He's Sick Of People Asking About It

Courtesy of ZeroHedge. View original post here.

Listening to the crypto bulls of yesteryear continue to defend their case for new new all-time highs, despite a growing mountain of evidence to suggest that last year's rally was spurred by the blind greed of gullible marginal buyers (not to mention outright manipulation), one can't help but feel a twinge of pity for Mike Novogratz and Wall Street's original crypto uber-bull, Fundstrat's Tom Lee.

Lee achieved rock star status thanks to ...



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Members' Corner

Blue Wave with Cheri Jacobus (Q&A II, Updated)

By Ilene at Phil's Stock World

Cheri Jacobus is a widely known political consultant, pundit, writer and outspoken former Republican and frequent guest on CNN, MSNBC, FOX News, CBS.com, CNBC and C-Span. Cheri shares her thoughts on the political landscape with us in a follow up to our August interview.

Updated 12-10-18

Ilene: What do you think about Michael Cohen's claim that the Trump Organization's discussions with high-level Russian officials about a deal for Trump Tower Moscow continued into June 2016?

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Mapping The Market

Trump: "I Won't Be Here" When It Blows Up

By Jean-Luc

Maybe we should simply try him for treason right now:

Trump on Coming Debt Crisis: ‘I Won’t Be Here’ When It Blows Up

The president thinks the balancing of the nation’s books is going to, ultimately, be a future president’s problem.

By Asawin Suebsaeng and Lachlan Markay, Daily Beast

The friction came to a head in early 2017 when senior officials offered Trump charts and graphics laying out the numbers and showing a “hockey stick” spike in the nationa...



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ValueWalk

Vilas Fund Up 55% In Q3; 3Q18 Letter: A Bull Market In Bearish Forecasts

By Jacob Wolinsky. Originally published at ValueWalk.

The Vilas Fund, LP letter for the third quarter ended September 30, 2018; titled, “A Bull Market in Bearish Forecasts.”

Ever since the financial crisis, there has been a huge fascination with predictions of the next “big crash” right around the next corner. Whether it is Greece, Italy, Chinese debt, the “overvalued” stock market, the Shiller Ratio, Puerto Rico, underfunded pensions in Illinois and New Jersey, the Fed (both for QE a few years ago and now for removing QE), rising interest rates, Federal budget deficits, peaking profit margins, etc...



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OpTrader

Swing trading portfolio - week of September 11th, 2017

Reminder: OpTrader is available to chat with Members, comments are found below each post.

 

This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here ...



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Promotions

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Phil has a chapter in a newly-released eBook that we think you’ll enjoy.

In My Top Strategies for 2017, Phil's chapter is Secret Santa’s Inflation Hedges for 2017.

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