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August 25, 2009

A Caution Condition?
by Marty Chenard

One of the things smart investors do, is to keep an eye out for "Negative Divergences". Market pullbacks are often seen right after a Negative Divergence fails to the downside.

As an analyst, I look for the possibility of negative divergences developing on my radar screen.

Like today for instance ... if you look at the New York Stock Exchange Index and its MACD indicator, you can see the possibility of a Negative Divergence that will come into play.

In the May/June time period, such a Negative Divergence came into play and the market had a pullback as seen on the chart below.

Now, if you look at where I put the "Caution" on the chart, you can see the possibility of another Negative Divergence building.

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Marty Chenard
StockTiming.com
Asheville, NC 28805
Tel: 828-296-1200

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