Weekly Divergence In The Major Indexes

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November 15, 2008

The pressure is building under the foot of a weekly divergence in the SPX, RUT, NDX, COMPX and the other sectors that have been smashed, namely commodities, financials, and real estate.

A relief rally typically happens when this setup is showing its face. We had a rally off the 3rd week of October low based on this pattern. This time I think we will crack up to those levels I’ve been patiently waiting for.

The rest of the beaten downs:


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  • Steve

    What is interesting to me is that with all the bad news coming out and the pessimistic sentiment that prevails is why the major averages have not met the 02 lows? I mean, one would think the banking system is worse off than in 02, and if the horror show we have seen in Sept, Oct and half of November cannot put the indexes at the 02 lows, what the hell would?

  • http://www.stockrake.com StockRake

    A hit of the 2002 lows would produce a bottom that would last alot longer (I think) than just a short term rally. I don't think they get there.

    I think we get a monster bear market rally and then selloff again down the road. Something along the lines of the Sept 2001 – March 2002 rally.

  • Steve

    What is interesting to me is that with all the bad news coming out and the pessimistic sentiment that prevails is why the major averages have not met the 02 lows? I mean, one would think the banking system is worse off than in 02, and if the horror show we have seen in Sept, Oct and half of November cannot put the indexes at the 02 lows, what the hell would?

  • http://www.stockrake.com StockRake

    A hit of the 2002 lows would produce a bottom that would last alot longer (I think) than just a short term rally. I don't think they get there.

    I think we get a monster bear market rally and then selloff again down the road. Something along the lines of the Sept 2001 – March 2002 rally.