In May, the sentiment had become more negative, which suggested the worst of the correction was over.

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With equity markets have experienced a massive correction in the last several sessions, negative economic data appears to have been brushed off by traders who have executed what amounts to a relief rally.

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The daily on-balance volume (OBV) does show a negative divergence, line b, which is consistent with a correction.

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The very next month the stock market rolled over into a correction, and a month after that the surprising negative economic reports began to pile in for May and June, and now into July, including dismal monthly employment reports, plunges in home sales, unexpected declines in retail sales, auto sales, manufacturing, and consumer sentiment.

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The correction was severe enough to turn enough of the bulls negative on gold, which created another good buying opportunity.

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