Just like last week, the trends of the three main US indices (DJIA, NDX and
SPX) remain up in all three time frames - daily, weekly and monthly. And once
again, they failed to break above the resistance levels identified in our
monthly charts.
The lackluster $ flow, which gave us an early warning about an imminent pullback,
didn't mislead. We saw the first signs of volatility returning to the markets,
but still way below pre-2012 levels:
Despite the fact that the indices recovered their early week losses, $ Flow
continues to be a source of concern, and is painting a negative divergence
with price, suggesting that there wasn't much real buying the last couple
of days:
Therefore, until the indices manage to break above their monthly resistance,
the caution flag remains on, and we'll keep a close eye on the pivot line
for signs of trouble:
George Krum is the author of the "CIT Dates" blog and several
books available on Amazon.
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