One of our trenders has turned neutral. Take a look at the comments and you can see how even though we are loosing the steam to make higher highs, this mile long train full of good ole’ West Virginia coal is gonna take a while to stop and reverse.
The Zweig is at the bottom of its current correction area. Today we will watch for either a violation or a turn-around.
The CVI continues to look quite strong. This is the indicator that helped us call the March top this year with its bearish divergent pattern. That hasn’t even set up yet!
The 40 DPI is our worry index. It never really got into a rally pattern and it is starting to show roll over in here:
But the NH/NL index remains very strong and established:
The McCSI trender remains bullish. It is divergent from the April high, however. Again, notice how slow price turned form the end of the 2011/2012 rally. The McCSI went bearish at the beginning for February, yet it wasn’t until April that prices actually corrected.
That feeds into our NH/NL cumulative index, which went neutral on us yesterday, looking for a new count today. Notice that when this index went bearish early in the beginning of March, we started a series of pushes with the market trying to go higher, an XYZ top. It was the beginning of April this year, with the final crossing for the 15 DMA on this signal, that we issued our full bearish warning. We would expect some similar behavior at this top. Ie. It is ok to be an early bear, just understand the early bears have a tougher ride. Watch that 15 DMA.