This chart alone suggests a bounce is coming without considering the last 9/10 days have been down days in the markets. Divergences in the TRIX, $NYMO, and a flat line in the RSI is a win for the bulls as well.

Djia

Now lets look at a chart of Barclays 20yr T-Bond which runs inverse the Djia and you’ll see a very common bearish candlestick pattern call the “Evening Doji Star”. Basically it’s a 3 day pattern that suggests the buyers are running out of steam with the middle candlestick being the top of the current move.

TLT

ACTG is a possible bull play as it is setting up for a nice breakout that has developed over the last 3 years. This could just as easily turn into a double top, so it will be important to see how it reacts when it gets to previous resistance and you’ll want to see it break out with authority. If it can then this should be a big winner.

actg

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One Response to “Timing the Market Using Positive Divergences”

  1. Abdul Rahim Says:

    Surprisingly auto sales for June were up for all Makers. Last month being a terrible month for investors and now come July, in the past had seen some relief rally. Macro and market internals still no good but good divergence on yours indicators deserves very much a bounce in the waiting. Appreciate your alert Jeff.

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