By Jeff Pierce
At the open the markets dropped like a rock and have since bounced immediately. This was not surprising given the positive divergence that’s was taking place on this 60 minute chart two times. First yesterday’s low set up positive divergence as the RSI was higher than it was back on the 22nd of October, yet price made a new low. And yet today price made another new low and yet the RSI was even higher than yesterday’s lowest point. Double Positive Divergence occurred, and while that alone isn’t enough of a reason to assume the markets could bounce, add in a new moon today and you have reason to suspect we could see a minor trend change.
The trend remains down so I don’t view this as an opportunity to get long anything, as it is a time to use any rally to unload any remaining longs you may have and/or look for shorting opportunities. Until my timing signal changes, my stance will remain bearish.
Nasdaq Composite Index ($COMPQ) – 60 min.
Red Circle (Long Term Signal turns bearish)
Red Arrow – Issued a short trade alert to my free newsletter subscribers.
Jeff Pierce is a momentum trader that specializes in market timing. He utilizes a proprietary timing system that helps minimize emotions and trading biases within his trading plan. He offers a free newsletter at zentrader.ca that alerts you to trend changes within the market so you’ll always be on the right side of the trade.