The State of the Trend
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: