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Dandruff and Divergences


I am staaalking you . . .


As I peek at Japan down . . .a lot, and our futures joining the southbound train, here are a few charts that warm Boo's heart. I am not offering them as advice of course, just to show that while price ultimately is the final arbiter, other footprints should be respected to avoid nasty surprises.

First a couple of homies, Meritage Homes (MTH) and NVR (NVR), both exhibiting dandruff my two chocolate labs would be proud of. Note how in both cases volume is playing its part quite well, spiking up as the prices spike down.

Next a couple of monster "trenders", Chicago Merc (CME) and Precision Cast Parts (PCP). The divergences between price and volume, and price and momentum are growing. If one subscribes to the idea that "all good things must come to an end", it may be a good a idea to play these names with the right hand up.

Our fearless leader often tells us that technical analysis is only one tool in the arsenal, and not the whole story. So use these pictures wisely and have a great day!!

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No positions in stocks mentioned.
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