When we might expect to see an end to this pullback

Looking at the NYMO weekly chart relative to the SPX an interesting correlation pops out.  For just the 4th week since the March 2009 bottom, the NYMO has broken below -100 on the weekly chart.  Each of the previous times, this marked the low for the NYMO, but not for the SPX.  While the SPX went on to make a lower low, the NYMO made a higher low creating positive divergence against the SPX.   On the first occasion, the NYMO made its low during wave 3 of C down in November of 2008, the SPX bottomed around 3 months later.  On the second occasion, the SPX bottomed 2 months later, on the 3rd, the SPX bottomed less than 1 month later.  Since this pullback is relatively modest compared to the March 2009 bottom, we can probably expect to see an SPX low within 3-8 weeks of the NYMO bottom of the 2nd week of May.  (Do to the time it takes to build divergence, I believe the weekly chart is a much better chart to use for the NYMO if what one is looking for is positive or negative divergence).

About alphahorn

I received an MBA from Columbia University’s Graduate School of Business in New York and am a Wall Street veteran. I’ve worked for a number of investment banks including Smith Barney and First Boston/C S First Boston in New York. Over the years, I have developed my own Proprietary Swing System and I combine that System with my own Elliott Wave Analysis to trade.
This entry was posted in Uncategorized. Bookmark the permalink.

Leave a Reply