PreMarket Outlook and a Talk About Divergences 11/07/08

The S&P 500 Index has reached the 62% correction line, which sits just above a support zone created in October. Let's see if this attracts buyers.



The PreMarket activity looks promising. The market, however, may and probably should test the low first.



Most of the correction waves yesterday were slightly less than 50%. In the morning activity, the correction waves started with bullish $TICK divergences. The end of the first correction wave did not end with a the $TICK making a lower high as the futures was making a higher high. Instead, the $TICK started making a lower low as the futures was making a higher low.

The end of the second correction wave gave us the Lower $TICK with a Higher Futures divergence.

Charles