Midtown Maelstrom Forecast ~ The Risk Averse Alert

Tuesday, October 30, 2012

Midtown Maelstrom Forecast

With the NASDAQ Composite's Bullish Percent Index flashing "danger" (RSI < 30) at a moment when the Composite Index appears fairly boxed in, we have additional evidence the market currently could be at risk of a sizable setback...

Just how significant might be the market's pending decline remains to be seen. Negatively diverging RSI and MACD over the entire duration of this year's advance certainly raises the likelihood trouble is brewing.

Chances are any upcoming weakness will be relatively limited, though. The fireworks probably won't begin until both weekly RSI and MACD turn negative (a la Q1 '08) and subsequently recover a bit.

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