Today 01/18/24 the Nasdaq 100 (NDQ) made a new all – time high. This new high was unconfirmed by the three main U.S. stock indices and a very important sector index.
Stock bull markets normally exhibit unison among most or all sub-indexes. For U.S. stocks the three main indices and sub-indices usually make new bull market highs together.
When bearish divergences occur its probably a sign the bull market could be nearing an end.
The weekly NDQ and Consumer Staples – ETF (XLP) illustrates a shocking bearish divergence.
Normally the XLP is very bullish relative to the broader U.S. stock market. Note that XLP made its all-time high in April of 2022. This was three months after the S&P 500 and the Dow Jones Industrial Average made their then all-time highs in January of 2022. The Nasdaq Composite made its all-time high in November of 2021.
So far the XLP has retraced just about 50% of its 2022 to 2023 bear market.
Today NDQ ended the session up 1.47%. The XLP ended the session with a drop of 0.12%.
Also note the weekly CCI and RSI for NDQ. Both have bearish divergence, hinting that the NDQ bull run could be nearing a climax.
The colossal bearish divergence of NDQ and XLP implies very late-stage bull market action.
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