Notice that on the long term SPY chart, we have three different rallies. The first rally (a) was from 68-96, for a gain of 41.17%. This rally saw an 8.33% (96-88) correction at the end of its move. The second rally (b) saw a rise from 88-115 for a gain of 30.68% and a correction of 7.62% (115-106). The third rally was from 106-122 for an increase of 15.09%. Then we saw a correction from 122-106 for a decrease of 13.11% Notice that the strength of the rallies is decreasing. Also notice that the last correction wiped out the entire previous rally. Finally, note that according to the A/D line we have not seen a mass exodus from the market.
The market still appears to be forming a double bottom (a). Also note the evenness of the A/D line (b) and the fact that the MACD has given us a buy signal (c).
With today's future's action (at least so far) the IWMs appear poised to move over their trend line.
The micro-caps are approaching their trend line.
The 7-10 year part of the Treasury curve and the long end (20+ years) both have the same chart. Both have formed a triangle at the top of a rally (a). Both show a flight from the security (b and c) and both show a decrease in momentum (d). In other words, both charts appear to be topping. In addition,
take a close loot at the dollar chart. While it has printed higher highs (a and b) the technical indicators are weaker for the second high. The A/D printed a lower number (c) as did the CMF (d) and the MACD (e). Interestingly enough,
We see the exact opposite with the euro, where the A/D line is rising on lower bottoms (b) as is the CMF (c) the MACD (d) (which has also given a buy signal.
Finally, note the industrial metals are still in a downtrend, delineated by lines (a) and (b).
