From All Star Charts:
It looks to me like the U.S. stock market is finally joining this Bearish Divergence party that we've seen throughout Europe this year. I think this is a development that is worth paying attention to.
You see, when prices in a given asset class make new highs, we also want to see momentum putting in higher highs. When momentum diverges, it's a heads up that something isn't right.
Think about it, when you throw a tennis ball up in the air, momentum in the speed of the ball is going to slow before it eventually hits its peak and reverses right? Same thing in markets.
In our case, we use the Relative Strength Index (RSI) as our momentum indicator of choice. We saw this oscillator diverge out in Europe throughout January, and we're currently watching the consequences...
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