RTH Retail Sector Overbot Rising Wedge Negative Divergence

Keystone remains negative on the retail sector this year but that does not stop the price from climbing. The rising blue wedges and negative divergence (red lines) should spank price down. Tomorrow we receive the Retail Sales data which may be a watershed event for markets. In May 2006, markets experienced a sharp sell off which was initiated by weak retail sales data.

The RSI and MACD line will want to see matching highs after a spank down occurs, so an M top would be a candidate moving forward. Note the severe drop off in volume as time moves along, price now moving up on vapor. Interestingly, the RTH received a stock split 3 for 1 in mid-February, this allows Ma and Pa, and Joe and Jane Sucka to enter the retail sector, as they lap up the daily media hype, and serve as the bag holders. The stock split made RTH more available to Ma and Pa at a cheaper price so the retail trader moved into retail stocks. The high gasoline price has to make an impact on retail sales as well. At 8:30 AM, with the Retail Sales data, we find out if they are the bag holders, or not. The chart shows a significant top forming for retail sector and roll over would be expected as the weeks play out.This information is for educational and entertainment purposes only. Do not trade based on this information. Consult your financial advisor before making any investment decision.