DecisionPoint has been on a roll or our indicators have been. Most notable, last Wednesday we let DP Alert subscribers know that a downturn was likely. Thursday the market fell out of bed. We mentioned yesterday to subscribers of the DP Alert that due to short-term indicators being so oversold and finally turning back up, we should see a rally today. We also mentioned yesterday that positive divergences were materializing.
We have found that one of the critical determinants of a major market bottom is a positive divergence between price lows and New Lows. We weren’t quite seeing that on the SPY New Highs/New Lows chart. However today we decided to take a look at the NYSE and Nasdaq New Highs/New Lows charts. We saw stunning positive divergences that had to be presented not only to subscribers, but also to our followers with a free article.
The SPY is seeing a very short-term positive divergence between price lows and New Lows over the past three days, but it didn’t see a positive divergence using May and June lows.
However, check out the NYSE and Nasdaq. Clear, strong positive divergences.
Conclusion: Add this to our already oversold short-term indicators and you have a recipe for a bear market rally. These divergences called the 2020 bear market low, but we don’t believe that the bear market is over yet.
Click here to register in advance for the recurring free DecisionPoint Trading Room! Recordings are available!
Technical Analysis is a windsock, not a crystal ball. –Carl Swenlin
(c) Copyright 2022 DecisionPoint.com
Helpful DecisionPoint Links:
DecisionPoint Alert Chart List
DecisionPoint Golden Cross/Silver Cross Index Chart List
DecisionPoint Sector Chart List
Price Momentum Oscillator (PMO)
Swenlin Trading Oscillators (STO-B and STO-V)
DecisionPoint is not a registered investment advisor. Investment and trading decisions are solely your responsibility. DecisionPoint newsletters, blogs or website materials should NOT be interpreted as a recommendation or solicitation to buy or sell any security or to take any specific action.