MACD Divergence Scan - June 5, 2022

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Dear Webinar Participant,

Hello from New Hampshire. I flew home last week and this weekend was able to spend several hours on a visual review of our automatic scans.

Last weekend I wrote to you from the road: “The corrective rally is in full swing. My “soft” target (approximate, subject to revision) is 4300+ for the S&P.” The market was closed on Monday, poked its head up to new rally highs on Tuesday and Thursday, and both times got smacked down the following day. The key question at this time: is the rally that erupted on May 20 already finished or does it have more life left in it. Let’s review our data.

In reviewing the Impulse system of the US and world markets, I skip monthly charts on the first weekend of the month, since their data is too short. The weekly charts present a mixed picture. As you can see above, international markets show a slight strengthening, the US sectors a slight weakening - but US key indexes contradict that by their slight strengthening (the weekly S&P switched from red to blue).

On our automatic scans of the S&P500 component stocks, weekly MACD remains strongly bullish (47:8), weekly Force Index is slightly bullish (9:5), and daily MACD somewhat bearish (3:15). The balance of my visual reviews is slightly bullish, at 9 to 4.

The key bullish factor is the Spike signal that I reported to you in May. In my experience, it is the strongest buy signal in technical analysis. Even in bear markets (which is where I think we are) it usually delivers several weeks if not months of a corrective rallies. The sweetest part of a rally, its explosion from the lows, is behind us, but the weekly S&P is still below its value zone, whose upper edge will be near 4270 tis week, and that's a very realistic target. Look at the chart of capitalization-based NHNL - the green line of $NH is solidly above the red line of $NL.

I look forward to seeing you at our webinar on Wednesday - email me your questions.

Best wishes,

Dr Alexander Elder

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