Sunday, November 29, 2009

Weekend Long Term Perspective

In regard to momentum, I continue to observe negative RSI divergences on all timeframes: from the hourly charts to the weekly charts. All uptrends during this entire bear market have ended at a long term key pivot. The SPX has been trying to break through the key 1107 long term pivot for nearly two months now with no success. Finally, the internal momentum of this uptrend has been deteriorating. The SPX has closed below the 20 Day EMA first time in two weeks.
The NYAD is displaying negative divergences, the financial/banking sectors (XLF, KBE, KRE) are in downtrends along with their leader GS. Plus, several foreign indices are in confirmed downtrends: ASX, BSE, DAX, NIKK and the STOX. At this stage it will not take much more selling to end this uptrend.
Over the past two weeks the SPX has traded above 1110 on five separate days, and has not been able to break through the 1107 pivot range on any of those days. In fact, over the past three weeks the market has appeared to be churning. During this period each Sunday night the USD was sold heavily overseas, the SPX surged on monday, and then went flat for the rest of the week. This action is similar to the churning action at the top of the last uptrend.
New Swing position: SHORT from 1096.50 as Twitted on Friday Nov 27. The retracement scenario played out as previously described. The $ES_F retraced more than 62% of the drop after the Dubai ,U.A.E financial news.
Update on Swing Position from 1096.50 on Nov 29:
This position was exited early for +10 pts profits due to a business trip.

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