12/22/2008

More underlying market weakness

The Advance/Decline indicator is showing further market weakness. I last posted about the overall market here.

The above chart is the 5- and 10-dma for the NYSE Advancing Issues indicator. Notice that the moving averages are making lower highs even though SPX made a higher high. This is bearish divergence, as it indicates that fewer stocks participated in pushing the index higher

4 comments:

Seawolf10 said...

marketbrothers, do you short the eur/gbp directly or go long the british pound?

Narayana said...

I shorted EUR/GBP directly.

Seawolf10 said...

why is there so much strength in the eur compared to gbp and usd? seems technically way overdone and fundamentally flawed as well

Narayana said...

I'm not sure either, but I know that this kind of blow off doesn't last long. I was also watching to short EUR/CHF around 1.58, but never pulled the trigger.