I blogged about SOX NDX divergence last week http://viewonmarkets.blogspot.com/2011/07/sox-ndx-divergence.html We now have confirmation and a pretty good understanding why NDX can't get going. SOX to NDX is like DTX to DJX. It is a very important and vital component of tech without which the recovery can not be confirmed. Chips are in all tech products. Last night and this morning we got weak guidance by chip equipment companies, and an earnings preannouncement by another chip co. Funny enough, yesterday we had one analyst upgrade the group. Folks, this just tells you that those clowns are not to be listened to...
So let's revisit the technicals: Cup and handle formation and 403 support are gone. It is heading for the lows of the year. In a very bearish development - 50 dsma is threatening to cross below 200 dsma, thus creating a "death cross". Watch out longs!!
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