When I told you all that this rally would likely run 500 points, most of you snickered arrogantly to yourselves.
When I told you that the tradeable rally would likely begin after a Dow Jones bounce at 10,750, you promptly sent my post to the circular file. Tuesday’s low of 10,827.71 was a scant 0.7% from my prediction. Here is that post, by the way: Technical Analysis of the Dow Jones Industrial Average.Â
Enough with all that. Lets talk about divergences.
When I look for a divergence, 90% of the time, I look at the MACD compared to price.
The divergence in the Dow Jones is textbook. As the index was making lower lows, the MACD was steadily heading up to the zero line. In other words, the movement of the MACD had diverged from the movement of price on the Dow Jones.
Of course, the MACD could have reversed, and the Dow Jones could have fallen to new lows, as it did in the middle of June. Even that type of signal, the failure of the divergence to follow-through, is tradeable.  Divergences are not a sure bet, but they do tell you when to be paying close attention.
Ok. For your accurate call, I will take the chicken, gravy and biscuit flashing pics off your page.
However, the Moonshine Parlour stands.
No, I like all the flashing stuff and the moonshine parlour. Please, just take down your awful handwriting.
Good job Wood. I enjoy reading your blog. You should find a position with a major hedge fund/asset mgt. co. as a CMT. Your technical analysis is as good as it gets.
CAP, I’ve considered getting my CMT. Honestly though, I’ve been in graduate school, through 2 degrees, since 1998. I turned my last assignment in on my last class today. Wooohooo….Anyway….so I’m thinking that I just do not want to do anymore studying, even for a CMT. That feeling will likely change within a year or less though, and I might actually give it a whirl.
Is it okay to move you from my discontinued blogs worth reading list back to the regular blog roll? Ya going to keep doing this for awhile?
Just checking. 🙂
But the handwriting (especially “Wow!”) ties the whole thing together! It never fails to crack me up.
Great call, Wood!
All this talk about chicken, gravy and biscuits is making me hungry.
Off to breakfast.
Dog, go ahead…
I’ll be here for a while.
Hey anyone has any idea how long this ass-raping rally will last?
allcash, I’m expecting a pullback over the next few days, and then I believe the rally will continue. I’ll get a post up over the weekend outlining my thoughts on that topic.
so woodrow, what really happened at da job? did you get fired? compromised with the lady boss to let you watch-trade the markets during office hours? ya promised to bang her ala Mile High Club and make money for her? spill it why don’t cha for a good read?
Nah, nothing that good. The organization went to four 10 hour days due to the egregious cost of energy. We may have to go back to regular schedule in a couple months, but for now, I’m off Fridays.
TGIF!
i agree that we have reached a short-term bottom. Just that i cant find any good stocks to buy… I probably buy indices ETF….Somehow i wanna wait for more spx pullback to initial a long position… sigh.