Sunday, May 17, 2009

Rubber Band...breaking?

I've been saying it for a couple of weeks now...this market has to have some sort of a significant pullback. I showed you the double trendlines the other day...and now this from Action Forex:



The last time we had a negative divergence like this, I wrote about it in a post about the Dollar, and it got crushed. In the above, you see during this whole rise, the divergence in volume (which is basically what a MACD is.) We are still in the channel, but I thought it had broken on the 4 hour, as I showed the other day.

Oddly enough, in the next post, Kathy Lien makes a great case for a bearish Dollar, which is good for equities...

Strange days indeed.

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