The past week or so I've been mentioning the divergence between the Russell 2000 and Nasdaq on one hand and the S&P 500 & Dow on the other. It seems like there's a tug-of-war to see if the smaller caps will drag the big caps down or vice versa. Those smaller caps are on the verge of some pretty serious technical damage as you'll see below.
The Nasdaq continues to flirt with the bottom of its month-plus range. Buyers are conditioned to buy in this area so it may take some big news to break the floor of that range.
The QQQQ is showing just a bit more weakness than the Nasdaq Composite. Today it had its lowest close since mid November.
The S&P still looks fine to me...
The Russell is ping-ponging between its 20 and 50-day moving averages...
Last and least, the semiconductors continue to suck wind.
No changes
| Trend | Nasdaq | S&P 500 | Russell 2000 |
| Primary | Up | Up | Up |
| Intermediate | Up | Up | Up |
| Short-term | Down | Up | Down |
(+) Indicates an upward reclassification today
(-) Indicates a downward reclassification today
Lat Indicates a Lateral trend
Hi Mike,
In total agreement about tech. If you look at the MACD/Ultimate Oscillator/ADX of the Nasdaq Bullish percents, Nasdaq Summation index and Naz stocks over 50-day MA, they are all in disarray - shades of April/May 2006.
Last 3 charts:
http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID446477
Best wishes,
Declan
why do u use your stoch oscilator when the market is trending sideways or consolidating...its useless
Hi Mike,
I see we are in agreement about the weak nasdaq but did you notice the triple divergence in the S&P? I posted a chart of this divegence on my blog. Now I have reasons to be bearish on the S&P as well..:-)
Declan, nice chart(s) as usual.
Pete,
I hope you're joking about that comment. Oscillators are most useful when the market is consolidating or going sideways. I've written that a million times on this blog.
Kevin, I hadn't seen that b/c I don't normally use MACD but that's an impressive divergence.
Change the $spx chart to weekly or monthly, and note the MACD confirming the uptrend. Note also the sell signal on the weekly in May and buy signal in August. Guess it depends on your timeframe.
:-?
Oh, on the daily charts of the $spx, note how the 20 and 30 ema are providing a support. If I were thinking about a short (which I'm not), I would look for a failure there before initiating. YMMV (your mileage may vary).
Hi Bill,
Yes the weekly and monthly MACD are confirming the uptrend but the daily timeframe will ALWAYS change before the weekly and monthly. Just like the daily NDX 50 average will always be broken in an uptrend before the weekly 50 average. It all happens on the daily timeframe first and then eventually affects the weekly and maybe even the monthly if the move is large enough.
Like I said, depends on your timeframe. If you were short today or yesterday, jolly good show! If not, the odds are against you for a couple of days. Three down days in a row is a short-term long signal for the index.
On a different timeframe ... you don't need a trendline for this index, since August you can use the 12 and 26 ema for support. Each penetration of the 12 has led to a bounce of the 26. A high is made, followed by a week to two weeks of sideways to down, and then another high.
I would have to see a close below the 26 ema to reconsider my bullish stance.
YMMV. That's why there's a market ...