Let me be clear that while I’m starting to see some bullish divergences I haven’t made up my mind if I’m going long on any positions tomorrow. It will most likely be an EOD decision but I wanted to point out a few things I’m seeing. It will be far more interesting to watch this from the sideline without any emotion attached to the outcome.
- Positive divergences on RSI / McClellan Oscillator
- TRIX is higher now than it was in the beginning of May when the Dow was much higher in price suggesting the Dow will move higher
- Volume on Friday’s sell off wasn’t extremely high. Distribution day yes…but not crazy high where everyone was liquidating. This could be a bearish situation where capitulation hasn’t set in as well. Tough to call
- Inability to make new yearly lows on the Dow and the VIX is nowhere near it’s recent highs
