As the S&P 500 (SPX) and Nasdaq Composite (IXIC) continue to climb, internal momentum indicators are becoming more bearish.
The 06/29/21 blog “Historical Perspective of Stock Market Momentum” illustrated the Bullish Percentage Index for the SPX ($BPSPX). The daily $BPSPX chart courtesy of StockCharts.com shows the activity as of 07/09/21.
On 07/08/21 $BPSPX made a new near-term low. The SPX rally on 07/09/21 has brought $BPSPX back to the bottom made on 06/21/21, a shocking near and longer-term bearish divergence.
For several years, the NYSE – Advance/Decline line has confirmed price action. Divergences are rare and small, spanning only a few days. What’s happened this year with the IXIC – Advanced/Decline line ($NAAD) is more traditional action.
The daily $NAAD chart illustrates the bearish divergence.
On 07/09/21 IXIC made a new all-time closing high yet $NAAD was significantly below the bearish divergence made at the June high.
The daily chart of NYSE New- 52 – Week Highs ($NYHGH) illustrates action up to 07/09/21.
Another shocking bearish divergence. The next blog will focus on external momentum indicators