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Market Continues to Unravel

Rating: 3 votes, 2.33 average.
Retail investors see this POMO stuff as a safety net to take risks while the mutual fund machine recommends that investors buy high quality stocks. Incredibly, investors are repeating the same mistakes that have happened time and time again in believing that they have some kind of edge after reading the QE2 headline talk. "It's a guarantee that the dollar will go down." The advance-decline index which is heavily subscribed, still supports the bull case, but a look under the market's hood is looking even worse than it was in our last checkup.

As one of the lone bears out there, I've put together a few more charts that show the true waning breadth as the distribution of equities continues.

All charts courtesy of

I've blacked out the names of the first two charts below, but I'd like the chart wizards to answer the Following two questions: "Which chart below would you buy? Which would you sell?"
Chart 1
Returns down?-dnv10-png

Chart 2
Returns down?-upv10-png

Chart #1 is NYSE Down Volume 10 DMA and Chart #2 is NYSE Up Volume 10 DMA. I'd say that chart #1 is looking a bit more healthy than #2.

Next up, McClellan Oscillator which is back below the zero line and failed to make a higher high. Notice the two divergences with the key low points in the NYSE and the declining tops in NYMO.

Returns down?-nymo-nya-png

More bear food here in the $BKX. Is that break of the pennant a head fake or is it a break?

Returns down?-bkx-png

One more fun image courtesy of yahoo finance. Once again, the Nasdaq rallies on more decliners than advancers.

Returns down?-decissues-jpg

That's all for one night. I'm thinking that next time we'll take a look at the heartbreak taking place in the steel sector which is a better indicator than consumer discretionary AAPL iPhones.

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Tags: divergence


  1. robo's Avatar
    Yes Sir - Tops are a process not an event, and this one is almost complete in my opinion.
  2. JTH's Avatar
    Preach it brother!
  3. alevin's Avatar
    thank you, bullitt, I'm still one of the lone bears too. wish I was better at quick trading, but I'm an intermediate kinda gal, still learning when to believe the intermediate signals. I'll get it right one of these days, til then I'm sitting tight except for a few quick (usually wrong) ventures.
  4. Bullitt's Avatar
    The herd is not prepared for another flash crash, selloff or let alone 'correction'. Take a look at that flash crash that happened in GLD in the AH on Friday.

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