FCHI, the French Index, has had a joyous rally from a very negative chart pattern on absolutely no pulse. What does this mean? The pulse indicator is NOT connected with volume. One might argue this has been a rally on low volume, which may be true. But this pulse indicator ignores volume. What it does suggest is that the selling is not over.
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The FTSE Index, Great Britain’s stock index, is very similar to the French Index chart: a nice rally with no pulse and continued down-trending of the CGTS indicator.
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The German Index, GDAXI, is almost exactly the same as the other two charts. The Brown Line (M2F ALT) suggests the bounce-back rally should end or has already ended (is overbought) and the next decline will determine if we are going lower. If the CGTS indicator (black line, central pane) makes a new low, then we will go lower.
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What about housing? Housing stocks have been impervious to pullback. But the rally in HGX has reached overbought levels with a rally having no pulse. It should go lower. Of course, betting against a market that is being fueled by Ben Bernanke with direct infusions is difficult and dangerous. But I ask again: where is the pulse?
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