A Caution Condition?

By: Marty Chenard | Tue, Aug 25, 2009
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One of the things smart investors do, is to keep an eye out for "Negative Divergences". Market pullbacks are often seen right after a Negative Divergence fails to the downside.

As an analyst, I look for the possibility of negative divergences developing on my radar screen.

Like today for instance ... if you look at the New York Stock Exchange Index and its MACD indicator, you can see the possibility of a Negative Divergence that will come into play.

In the May/June time period, such a Negative Divergence came into play and the market had a pullback as seen on the chart below.

Now, if you look at where I put the "Caution" on the chart, you can see the possibility of another Negative Divergence building.



Marty Chenard

Author: Marty Chenard

Marty Chenard
Asheville, NC 28805
Tel: 828-296-1200

Marty Chenard is an Advanced Stock Market Technical Analyst that has developed his own proprietary analytical tools and stock market models. As a result, he was out of the market two weeks before the 1987 Crash in the most recent Bear Market he faxed his Members in March 2000 telling them all to SELL. He is an advanced technical analyst and not an investment advisor, nor a securities broker.

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