Posted by magann14 on 17th of Dec 2010 at 12:55 pm
"Why is it that "negative divergences" aren't
triggering, which is rendering
various investing models powerless as the market runs over
them?"
For years, analyst and market traders have been
carefully watching for
divergencesas a clue to when a trend reversal was going to
occur. Many professional investors base their buy/sell
strategies on negative and positive divergences.
From a technical perspective,many
investors used to anticipate break-downs in market support
structures when negative divergences started to appear.
To the dismay of these investors, there have been a plethora of
negative divergences during the past month ... but, they have just
been sitting there dormant ... as the market continued
up.
We discussed this topic last week,
and it is important
enough to readdress it today.
So, what is going on?
The answer is that
there is another
forcein the market that has been
overpowering negative
divergences. In fact, negative divergences have
no poweruntil
afterthis force starts to contract.
What is it?
It is the "net amount of inflowing Liquidity" coming into the
market every day. "Net amount of Liquidity" is the
amount of Liquidity coming in or leaving the market after all the
selling has been absorbed ... or not absorbed.
Since September, the net inflowing Liquidity has been
in Expansion
territoryand in an up trend. Inflowing Liquidity
is the unseen force in the market that confounds many, and subverts
the power of negative divergences as well as many commonly used
technical indicators.
It isn't until Liquidity levels pull back in the face of
lingering negative divergences, that a market pull back or
correction finally occurs.
When inflowing Liquidity is in Expansion territory and at
a high rate of expansion, the market continues to move up in spite
of any negative divergences.
Posted by freddy123321 on 17th of Dec 2010 at 01:00 pm
First thrust will always be more powerful than the others. Does
not mean the trend is changed. Buyers are simply resting ,
therefore neg divergence forms
You got it Freddy. 2003-2007 there were many divergences
and Pretcher and crew were calling a top every week. Clowns.
Tops are formed in markets they dont just happen.
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Posted by magann14 on 17th of Dec 2010 at 12:55 pm
"Why is it that "negative divergences" aren't triggering, which is rendering
various investing models powerless as the market runs over them?"
For years, analyst and market traders have been carefully watching for divergencesas a clue to when a trend reversal was going to occur. Many professional investors base their buy/sell strategies on negative and positive divergences. From a technical perspective,many investors used to anticipate break-downs in market support structures when negative divergences started to appear.
To the dismay of these investors, there have been a plethora of negative divergences during the past month ... but, they have just been sitting there dormant ... as the market continued up.
We discussed this topic last week, and it is important enough to readdress it today.
So, what is going on?
The answer is that there is another forcein the market that has been overpowering negative divergences. In fact, negative divergences have no poweruntil after this force starts to contract.
What is it?
It is the "net amount of inflowing Liquidity" coming into the market every day. "Net amount of Liquidity" is the amount of Liquidity coming in or leaving the market after all the selling has been absorbed ... or not absorbed.
Since September, the net inflowing Liquidity has been in Expansion territoryand in an up trend. Inflowing Liquidity is the unseen force in the market that confounds many, and subverts the power of negative divergences as well as many commonly used technical indicators.
It isn't until Liquidity levels pull back in the face of lingering negative divergences, that a market pull back or correction finally occurs. When inflowing Liquidity is in Expansion territory and at a high rate of expansion, the market continues to move up in spite of any negative divergences.
First thrust will always be
Posted by freddy123321 on 17th of Dec 2010 at 01:00 pm
First thrust will always be more powerful than the others. Does not mean the trend is changed. Buyers are simply resting , therefore neg divergence forms
You got it Freddy. 2003-2007
Posted by searay on 17th of Dec 2010 at 02:26 pm
You got it Freddy. 2003-2007 there were many divergences and Pretcher and crew were calling a top every week. Clowns. Tops are formed in markets they dont just happen.