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Daily Analysis

We are witnessing a new technical paradigm:

"Equity price goes higher" while:

  • The McClellan oscillator is falling and since February 13 it has been in negative territory.
  • MACD and the Summation Index have a sell signal since February 14.
  • Negative divergences of RSI and NYSE Adv-Dec Volume

I don't recall to have ever seen SPX marking higher highs while NYMO is below the zero line. When Mr market decides to take a breather it will get quickly oversold hence I would not bet on a large correction.

NYSE McClellan Oscillator

I really don't have much to add to my last update.

I cannot fight against buy programs & HFT. Every time price threatens to challenge the rising trend line support of the bearish rising wedge, THEY achieve monster short squeezes.

I still think that the overlapping structure suggests that price is unfolding either an Ending Diagonal or an Expanded one, but as long as we don't see an impulsive down leg the dip buyers will keep this nightmare going on.

I can raise the sell stop at the breach of 1355.92

Larger Image

As I mentioned the main focus remains on Wednesday with:

  • ECB undertaking the second LTRO.
  • Month end. (Hence there will be the convenience of preventing the reversal until next month)
  • Fed Chairman Ben Bernanke delivers the FOMC's semi-annual report to the House Financial Services Committee.

I keep monitoring the price divergence of KBE & SMH.

VIX should also give us clues regarding the pending top.


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