5/8/2014 5:39:50 AM

Good morning Traders,

The divergence in the NYSE and Nasdaq continues. We are looking for a resolution. But what is the timing? Here is our cycles and basic seasonality chart for your reference:

Another interesting peak reading we are seeing from one of our indicators:

This 'neutral' reading is robbing from bullish and bearish readings - but at the end of the day, a reading this high is generally bearish.

Switching to oil real quick, since we are watching for a potential sell off:

And finally, the barometer:

I tend to fight the obvious when it comes to technicals because if everyone can see it, what good is it. So while we may see a move towards lows at some point, I am not so sure this pattern will play out - though the potential exists. Our model is suggesting the potential exists and we will continue to position for a next larger move, which is this case should be lower.

Regards,