Over the weekend the blogosphere was incredibly bearish. To top it off, when the futures market opened on Sunday evening and into Monday morning they were pointing to a huge gap down. But, Alphahorn wrote on Sunday evening that this move in the futures was a “HEADFAKE” and that I expect the true direction for the markets to be up and that the next pullback was still a bit into our future.
Was it: A) a lucky call (AGAIN?!) or, B) was I being tipped off by one of my tried and true indicators? If you answered B or both A and B, then you’re in the ballpark. Look at this chart below and note the indicator on the very bottom. When it builds divergence against price; it’s deadly, as it was again on Sunday and as it was the last time I timed the bottom to perfection. More to come later after a continue my search for my Microsoft Office.