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Strategies & Market Trends : John Pitera's Market Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: Hawkmoon who wrote (13988)	4/5/2013 2:25:36 AM
From: John Pitera	6 Recommendations Read Replies (1) \| Respond to of 33421

Hi Hawk, we have a serious global run coming.... I have outlined this to 3 people in PM's or on the telephone......... I don't feel like rolling it out at this very moment but I'll do it by the weekend..... It has cycle reasons why it should happen and I have not heard anyone else anywhere come up with this theory....... I have outlined it to Augustus Gloop and 2 (parnters who live on the east coast).....they find it intriguing........ I just don't want to do a half ass job off laying out this cycle theory when I am tired.......... John

To: Hawkmoon who wrote (13988)

4/6/2013 2:35:33 AM

From: John Pitera

2 Recommendations Read Replies (1) | Respond to of 33421

of 48309

Hi Now, I was spending half an hour writing out a detailed explanation and ranting on about other aspects of our insane central banking system........

here is a chart that illustrates the point

to answer your specific question you can see on the RSI that the last two lows in the index price have come with higher lows on the RSI and other indicators such as an 8 day rate of change index......

these divergences can provide a tip off of an impending change of direction of prices . Think of tossing a tennis ball up in the air.....it has maximum momentum and speed as it leaves your hand...... as it goes higher....... it slows down due to gravity and even through it is still going up it's dong so with less momentum.....ultimately the ball reaches the highest point it will go to and then it will turn around and come back down.........that's the basic concept ....Rate of change indicators,, rsi's and many other indicators are technical calculus derivatives.... as the RSI is derived from the actu

I know better to write longer missives on word and save them so they do not disappear....al price action.......

In a very strongly trending secular market you can see double triple and even quadruple momentum divergences and they will provide a sideways to mild price correction..... but then the strong primarily trend will resume...... thus it's not a give me to use momentum divergences as a sole indicator in system or technical trading........but as you know the major trend in Gold is in Question..... the miners are definitely getting beaten like bad dogs...... and with alll of this monetary stimulation occurring globally....... we are in uncharted waters...... as El-Erian of Pimco said on tv yesterday........ this entire episode is likely to end in tears........

John