Starting with the XJO... I was anticipating a move down from early January into early March. It did get off to a good start but now has rallied back to the high. The price print shows the slightest of false breaks at the double top and a clear divergence in the summation index so the odds of another reversal down here are quite high.
The SPX bull market is a veritable juggernaut! Or at least it seems that way at the moment. The last week however has seen a few of the divergences sharpen up so the (too) long anticipated break may be imminent.
Divergences shown below are:
- NYAD ema20 (which tracks the NYMO very closely but is slightly different);
- cumulative NYAD (the divergence is tiny but it is there); and
- the bullish percent index.
So breadth certainly under the pump, and increasingly so.
NAAIM sentiment is still way up there at 96 this week and has barely been under 90 for months!
The equity put/call ratio has turned and is heading back to the zone that could mark a high.
And the VIX is still unusually low.
Complacency rules it seems!!
