The following is just a small excerpt from my latest Weekly Strategy Session (please click on that hyperlink for details about trying it out) which I published for members and 12631 subscribers this past Sunday.
If the rally in the market late-last week seemed impressive on paper, but as not impressive individually, it was due to unimpressive participation across the board. As we have been noting, even the stronger indices have been sporting bearish RSI divergences since earlier this year.
For reference, the RSI is simply the “Relative Strength Index” used to identify changes in technical momentum. Above 50 is generally considered a bullish RSI, with above 70 viewed as overbought. Trending below 50 is considered a bearish RSI pattern, with below 30 considered oversold.
Here, the RSI is negatively diverging on both the S&P and Nasdaq weekly charts, meaning that upside momentum has clearly slowed in each index’s prior two peaks.
Given the weakness in the Russell, a cautious stance is maintained unless and until bulls can resolve these divergences in their favor via a powerful move to fresh highs in both price and RSI.
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LAKE!!!
The Lake Show in effect this morning.
Sold + 13% out for a win. Happy too!
Thanks Chess
LOCO working for me as well.