Nasdaq and S&P 500
The chart shows the once-in-a-while inter-market divergence between the Nasdaq Composite and the S&P 500, and such divergences can occur ahead of important market turns so it is worth paying attention to. As long as the new high in the S&P 500 is not confirmed by the Nasdaq it is indicating the potential that the negative divergence could result in a larger reversal in trend for US stocks. A lot of near-term divergences between US equities and sector plays have been seen recently as money chases a new home. Such rotation needs to be conclusive else it ends up marking euphoria.
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