The relative performance formed a very slight divergence at the 2011 highs (see circle), and shows a long-term downtrend (line f).

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The daily relative performance has also formed a negative divergence over the past six weeks, line i.

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Of course, in very strong bull or bear markets, we must rely on technical indicators that can stay with strongly trending markets, as momentum indicators like the Moving Average Convergence Divergence (MACD) indicator or Relative Strength Index (RSI) will top or bottom out well ahead of prices.

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Several days after the low (September 20) I became much more defensive as the weekly relative performance or RS analysis had formed a negative divergence and the daily OBV was below its WMA (point 7).

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While the market could continue to rise the indicators that show short-term overbought conditions such as the RSI (Relative Strength Index) and the MACD (Moving Average Convergence Divergence) are both solidly in overbought territory.

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