Price with respect to its 200 day MA
2007-2009 Bear Market
A newly defined downward sloping 200 day MA acts as a strong level of resistance irregardless of bullish divergence forming on the MACD indicator. Notice the extremely weak contra-trend when the second divergence formed in late Oct.-Nov. of 08. The declining 200 day MA loses its power of resistance when sloping down at an unsustainable angle. This angle of descent is due to an extreme sell-off in the market where severe technical damage has occured.
The spread between prices
The spread between price and it's moving average are at a distance rather stretched from the mean. Major bottoms in the market form when the MACD indicator is at extreme levels and coupled with Massive bullish divergence.
The difference in slope
Notice the declining slope of the 200 day MA from start to end. See how it picks up speed to the downside.
2011 Bear Market
The Slope of the 200 day Ma is just now beginning to slope downward. So where does that leave us?
What to expect
Possible Bullish Falling Wedge scenario
Possible Bear Flag scenario
3 strikes and your out!
Today's 30 min. chart