Maybe Zeev's read is correct:
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Worden Bros Comment
Mid-Day Caution
I attached the following MID-DAY CAUTIONARY Note to DIA:
The positive TSV divergence apparent in this chart demands recognition. So I have decided to comment on it in mid-session, which for me is unusual. TSV is moving up into the short-term setback that started a few days ago with a decisive breakout on the downside of a lateral congestion area. It exists in SP-500, DJ-30 and NDX--X, as well as their respective derivatives, SPY, DIA and QQQ.
It may well be that the March low will not be severed (or even tested) but that instead the market will take out the April high. If that high is taken out, the intermediate downtrend will have been reversed, and the chance of a new recovery high would be substantial.
Bear in mind it hasn't happened yet. There are still bearish factors to contend with. If these were individual stock charts, I would say punch the space bar and look for something less ambiguous. But when we're trying to get a fix on the market, we're stuck with whatever it's willing to give us. Nevertheless, this bullish TSV pattern has persisted stubbornly in all three key sectors and it obviously isn't just a coincidence. My advice is not to get your neck stuck out too far on the short side. –DW
Current Market Action: Breadth improved considerably today with 194 groups up and 45 down. The broad Russell 3000 had 1820 winners and 1003 losers. The Leadership Index was 622 to 313. Rapid growth stocks were 154 to 82. The Dow was 21 to 9. However, there were areas of marked weakness. The Nadaq 100 had 64 losers. My private list of 33 high-profile tech and new economy stocks had 28 losers. Electronics had 121 winners and 245 losers.
I changed the Minor-Trend Assumptions to "Up" for the SP-500 and the Dow, not because of the TSV observations explained above, but because both of these averages closed above three preceding closes. The Nasdaq remains in a Minor Downtrend. –DW
ASSUMPTIONS
Primary Trend: Up
Intermediate Trend: Down
Minor Trend
SP-500 and Dow: Up
Nasdaq Comp: Down
For ongoing remarks pertaining to ASSUMPTIONS, please refer to the notes attached to the appropriate charts (COMPQX, SP-500, DJ-30).
The concepts of Primary, Intermediate and Minor trends emanate from Dow Theory
For a discussion of these trends, refer to
"Street Smart Chart Reading – Vol. 2"—Pages 35-39 by Don Worden.
"The Technical Analysis Course" by Thomas Meyers is recommended as a broad-based introduction to technical analysis for beginners and as a handy reference guide for all traders. |
