Wednesday, March 16, 2016

Back In Sync

Yesterday I warned about the negative divergence that the market has been displaying for the last couple of trading sessions, and this negative divergence needs to be resolved or another extended pullback such as the one we have experienced from May 19, 2015 to February 11, 2016 could appear.

Today, the market did not display any conviction as it waited for the FOMC announcement. After the FOMC announcement and its downward revision on the number of potential rate hike for 2016, the market made a decisive move toward the upside. As the indices move higher, the negative divergence did not dissipate until the close approaches. At the close, the market squeaked by with a small margin but did eliminate the divergence. The market is now back in sync and until further notice, look for the market to make higher high. The charts below provide some of the potential target levels for the near term. Notice the September, 2015 FOMC pivot high was tested and reclaimed today.

SPX:

(click on the chart to enlarge)



ES_F:




SPY:



Here is the OI chart for the SPY showing 205 could be one of the pin for this Friday OpEx.






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