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 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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