Monday, May 3, 2010

S&P 500 - Weekly Bearish Divergence

Here is a potentially damaging divergence that had appeared on S&P500. I have no doubt that there could be something similar on Dow and Nasdaq.

I am guessing that a major correction could happen if the index closes below 1150. The fall could meet last low of around 1044. However, as the monthly up-trend is still unbroken and hence I do not think this is an indication to the end of a bull market.

My plan is to conserve resource until that happens (correction completes) or the current bearish divergence is cancelled through a strong spike up of prices.

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