SP Divergence and Bund Triangle reconsidered.

The SP500 advance over the past few days has continued, though on very light volume. I would not however read too much into this as conditions are likely to be affected by the August Holiday season. However, there is some 'Bearish Momentum Divergence' showing up on the intraday charts that could be indicative of a impending pause or correction. - That said the market does not always follow through on divergences, for one thing momentum is a secondary indicator, price is always the primary indicator, momentum is a derivative of price and time. Secondly, how effective divergence is, can sometimes depend on how advanced a trending move is, particularly on intraday movements. In the early stages of a trending move divergence can be less effective, whereas in the advanced or mature stages of a move, it is likely to exert a greater influence. -  This also adds a slight extra dimension to divergence, since how a market performs at a divergence can be crucial as to determining whether a move is in the earlier stages or at a more advanced stage. - The following chart is the SP500 chart, each candle is a 1/3rd of a trading day. This charts illustrates the above point and shows the current divergence.  - One final point, the similarities of the current market are in my opinion closer to the market in early March. At that time the index was climbing out of a correction in a rising wedge shaped formation, volume was very low, and Bearish Divergence was present, however, this did not lead to a correction.

(Click on chart to enlarge)

(The following paragraph is amended from this morning's original posting.)
With regard to the Bund future chart from yesterday. The Bund managed to break over the top of the upper triangle (descending) line, and moved up to an intraday high of 129.47 (See chart below). Unfortunately this move was less than impressive, and saw a drop back towards the upper triangle line. - At this point , I have to hold my hands up here, and admit that I may have been a touch lazy with my analysis. Usually when I look for a significant development on the Bund I will consider the behaviour of the German 10 year yield chart, - the Bund is a Future based on the German 10 Year Government Bond. In addition I should also give consideration (though less so) to the current Bund future contract in its own right, in this case the Sep 10 Future. -- The top chart below shows the Bund Continuation Future and the Triangle I have focused on for the past couple of days. The 2nd chart shows the German 10 year yield chart (it moves inversely to the Bund), the chart below that shows the current Bund Future contract. -- Both charts are showing slightly differing continuation patterns to the Continuation Bund Future. The German 10 year yield shows a Bear Flag pattern, which has thus far held, the Sep 10 Bund future chart shows a Bull flag pattern, which too has thus far held and which remains well short of breaking.  -- In conclusion I deem the break over the past couple of days as suspect, though not failed yet. However, for me a break and hold over the critical 129.46/54 area is pivotal going forward, until then, and particular in light of the Doji Candlestick produced yesterday, a risk of a deeper setback to the low to mid 128s remains possible. - Though I will add that decent dips should provide buying opportunities, as I still favour a significant upside break as a probable sooner or later.