Negative Market Internal Divergence Undercuts Highs for April 26
Apr 26, 2010: 12:16 PM CSTThe S&P 500 began Monday April 26th on a push to new recovery highs, but it did so laboriously, forming negative divergences in all three key market internals we monitor.
With that in mind, let’s take a look at current lunchtime market internals in the S&P 500 for April 26:
This is a standard update post on mid-day internals. For reference, view prior posts including:
“Fun and Profit with Market Internal Divergences – April 21”
April 15: Market Internals Send Strong Warning Signal
April 16: Strangely Enough, Market Internals DO Matter
April 20: Mid-Day Check on Bullish Market Internals
We’re now in another ‘divergent’ situation with price scraping to new highs and internals failing to confirm the push to new highs at the 1,220 level.
That doesn’t mean a reversal is imminent, but that you should be more cautious with your longs and be prepared to sell or short (scalp) on a break under the trendline and moving averages at the 1,214 area as shown above.
Divergences often need price to slice through trendlines before being confirmed, or before you adjust positions – as price can rally higher despite divergences.
Watch these levels and the situation in internals going into the close today.
Corey Rosenbloom, CMT
Afraid to Trade.com
Follow Corey on Twitter: http://twitter.com/afraidtotrade
