5.23.2006

DIVERGENCES?

Everyone and I mean everyone is looking for a bounce off the "way oversold" levels and it looks like this morning the rally is actually appearing.

What am I going to do? Well my guess is that the first rally will be sold and then it will probably be time to cherry pick. If we rally this morning and then come back down and retest later in the week, we will then have the positive divergence we have been looking for as the indexes will be at their lows and the momentum indicators will be at higher lows. That is how Positive Divergences appear and what true technical traders try to find.

And of course more chatter about a switch to big cap stocks is upon us, at least that is what every bubblevision guest tells us except Bernie Schaeffer. Is there any chance that most of the bubble guests sell large cap stocks as their brokerage staple?

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