Normally that would bother me. But I see the A/D line climbing throughout in the NYSE. If you look at 1991 - 1994 you'll notice the same divergences. This was a time when a third wave was subdividing with a series of 1-2, 1-2, 1-2's ... we call it consolidating near the highs.
The April - August advance was the weakest of the lot. We didn't get too overbought (intermediate term), so we may not see the fear factor this time. However, we did slam down pretty hard in the middle of the month.
Elder wrote about The Hound of the Baskervilles that happens when a divergence is not confirmed, and it is followed by an opposite violent move. Maybe this will be the case this year... We need just a little patience.
You are referring to this activity (chart)? I feel the continued advance of the A/D line and the subdivision of the V wave negates the bearish divergences. Similar to 1991 - 1994
Agree! The SPX has been pretty violent lately. It feels like the bears are disappointed that they couldn't break this market. Every up opening sold off...every sell off reversed on panic short covering...there's lots of shorts and cash out there.
We have to enter based on our analysis, but keep our stops shorter (like in "keep your friends close, but your ...").