Tuesday, January 14, 2014

COMPQ Nasdaq Daily Chart Negative Divergence New 13-Year Highs

The Nasdaq dropped 61 points on Monday and jumped 70 points today. AAPL, GOOG, FB, TSLA, and all the other usual suspects pumping the index higher. The Nasdaq squeezes out new 13-year highs today. Is this the leader that says the other major indexes will follow close behind? The interesting aspect is how negative the chart is considering that a +1.7% up day just occurred. The red lines show universal negative divergence across all indicators. The prior neggie d resulting in the top and spank down 3 days ago would have been good enough to serve as the top, but alas, the bulls push it up a hair higher to create more new highs. The volume is lackluster compared to yesterday's selling. The power of the central bankers is relentless.

The action is somewhat comical and remindful of a Class B horror movie where the monster keeps coming back to life a couple times in the final few minutes to increase the intensity and drama. There is no way to send the markets lower. The Fed and BOJ have created this easy money Frankenstein monster that keeps coming back to life and pusing equities higher. Note how the 20-day MA at 4139, and rising, serves as support, also the lower rail of the rising blue channel. The weekly chart is negatively diverged as well, thus, despite all the bullish euphoria, it remains prudent to likely exit longs across the board and move into cash and/or play the short side. Is anyone ready for another retracement day to the downside? Watch the dollar/yen, now at 104.15. Use this as a pivot, higher dollar/yen means higher Nasdaq, lower dollar/yen and lower Nasdaq. This information is for educational and entertainment purposes only.  Do not invest based on anything you read or view here.  Consult your financial advisor before making any investment decision.

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