Market Breadth Divergence 05/06/15

You may remember I described a divergence signal I came up with for a market-breadth indicator a few weeks ago. I won’t bother to explain it again (you can read all about it here).

We have ourselves a positive divergence signal from today’s trading. Basically, the S&P 500 went down, while a particular subset of advancers vs decliners went up.¬†You can see this by the red vertical line below.

click to enlarge...if you dare.
click to enlarge…if you dare.

Should you trade based on this indicator alone? Yes! No! But consider it when thinking about a trade tomorrow. As I described in the earlier post, there’s a better-than-even chance tomorrow will be an up day.

Disclaimer: all trading involves risk. Trading based on something I’ve said entails additional risk, and is not suited for all investors. Especially those with money to lose.