Stock Market Viewpoint

Stock Market Viewpoint
Reading the Tea Leaves...

Tuesday, September 4, 2012

Opposing Indexes

Stock Market Technical Analysis Blog
Click on above image to enlarge
In the four charts above we have a case of opposing indexes.  The Nasdaq, S&P, DOW, and AAPL which you can say is nearly an index in its own right.  Looking at the 5 and 10 EMAs, the red and green lines on the charts, we see that on the top two charts the Nasdaq and AAPL have the green 10 line pushing their red 5 lines and prices higher today.  In the two lower charts, the S&P 500 and the DOW have their green 10 lines pushing their red 5 lines downward instead. 

This is the classic setup that happens after an extended market run up where the S&P 500 and DOW which are difficult to manipulate are trading true and actually selling and the Nasdaq and AAPL, their easily manipulated counterparts, are being supported and pushed upwards in hopes of starting a short squeeze to take the market even higher.  This divergence can go on for a couple of days or so but at some point this week one pair will have to give in and follow the other pair.  It will be interesting to see who gives in first.



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