Tuesday, November 20, 2012
Bulls Need To Be Cautious, A Failed Rally Attempt Like May Is Setting Up
The chart above is the SP500 and its 13 EMA, below the chart is the PPO indicator which measures the distance from the stock current price and the 13 EMA. Note the similarities last time the market corrected in mid May. The S&P500 went above its 13 EMA briefly and just tanked, this is playing out again, the S&P500 is now above its 13 EMA (pointed out with the PPO). On top of this the $NYMO is now barely positive (a recipe for the correction to continue after working off the oversold condition). The next few days will be critical, but I think it will not be that easy due to Thanksgiving Holidays diluting trading. This is time to trade with extreme caution.