Intensity Builds During Selling Periods In Recent Weeks

Author Larry Berman

Posted: 23 Apr 2012 re-posted from etfcm

Based on the RSI patterns, it is clear there is more intensity during the selling periods over the past few weeks. The market appears to be losing some longer-term sponsorship, but according to McClellan’s oscillator analysis, the odds of one more moves to new highs is still likely in this phase of the business cycle.

As we attended the recent Market Technician’s Annual Conference, an ad hoc sentiment survey showed a pretty significant bearish bias at the moment, largely due to the growing divergences we are seeing and have been writing about for the past month. We still see scope for this market to test the sellers resolve back above 1400 again during earnings period. Earnings have generally been good and that remains a strong positive underlying force in this market.

A close above 1440 would suggest a retest of the 1575 double top from 2000-2007, which would certainly give the technically based bears out there a big gut check. For now we are sellers into strength unless the market proves otherwise.


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