MACD Bullish Divergence

Thankfully it’s Friday for this crazy week. After last Friday’s huge sell-off I was almost sure we would see it continue this week. But with this V-shaped bottom we have put it, the market seem strangely calm once again. Once again the market out smarted me with irrational moves – I guess I should have known better right?

Anyhow, I’ll jump back on my “anti-bull” chair right now. It’s actually not that I’m completely bearish, because I’m not at all, it’s just that I’m not SUPER bullish either. Anyone who does coaching with me knows that I just don’t believe firmly in these parabolic moves lasting long. In fact, the longer they do last the harder the next leg down will become.

I try to be as bias in my analysis as possible

For disclosure purposes, I try to keep my emotions out of the market as much as possible. Thus, I get the same feeling (just in the opposite direction) when the market is selling off harder than it should. Case in point, these posts:

— Bullish Sentiment Once Again At Lows

— The Expected Yet Unexpected Rally

MACD Divergence looks similar

The recent daily chart of the SPX looks oddly similar to the chart back in May-Jul. We had a sustained run higher and all the time MACD was showing a slight bearish divergence. Now we have the same type of signal forming.

I could always be wrong and who knows, maybe stock will head another 10% higher this month. But it’s sure not worth the risk in my opinion. What do you all think???