Thursday, April 30, 2009

Minyanville posting: Bulls Out of Momentum

excerpt from this week's article:
"If the title to this article looks familiar, it's because it's the exact opposite of an article published on March 5, "Bears Out of Momentum".

On March 5, I wrote that the bears were running out of momentum. The following week, March 12, I continued the market-bottoming theme with a follow-up article, "Why Divergences Work". (In between, the equity markets made their unconfirmed lower low.)

The underpinnings for both articles was the high-probability value in the divergences principles, which states that price action must be accompanied by the internals of the market. Back in early March, price in the form of lower lows wasn't being matched by the internals, which are measured by momentum and MACD.

Well, guess what? That exact same set of circumstances is now in play, only in reverse....."

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