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Thursday’s strong close and positive A/D numbers have completed a positive formation on the McClellan Oscillator. It has formed a bullish divergence and then moved above the previous peak. Similar divergences, going back to last March, are noted on the chart. Most are just expecting an oversold bounce back to the 38%-50% resistance for the S&P at 1185-1100. This would be normal, but the high degree of bearish sentiment by newsletter writers and the public could surprise us on the upside.
