Sunday, June 12, 2011

Summer-Correction from BREADTH perspective

Let's assume we get a Summer-Correction, this is how this would look like from a Breadth point of view.

We would look for one major washout early on and then with weakening price action less extreme BREADTH spikes (a.k.a. Divergence).

Although the Bounce seems near I would not be surprised to a see washout beforehand , maybe testing the 200d SMA or some other level, followed by some volatile short covering.

Key takeaway nonethesless is the fact that the BREADTH-TREND has turned as seen by the flipped aggregate lines in the middle of the chart.

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