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On the threat of being labeled the boy that cried wolf, there are early indicators of a crack behind the NASDAQ 100 Index’s rally. These embody a violation of the Decrease Warning Line (dashed purple line, LWL) of the Customary Pitchfork (purple P1 via P3) after failing to carry the retaken floor above the Decrease Parallel (bought purple line). I do know I’ve been beating a lifeless horse for weeks, however there continues to be a repeated non-confirmation of the upper value highs within the Momentum / Breadth Oscillator (dashed yellow strains). Not solely does it replicate deterioration in upside momentum, nevertheless it additionally speaks to decaying breadth. There are early indicators of a break of the development in relative outperformance versus the SPX as witnessed by a drop under its longer-term shifting common (blue line) for the primary time in months (a drop of the shorter-term shifting common, purple line via the longer, would verify the breakdown). There was a pointy flip decrease within the Stochastic Momentum Index (backside panel) that on the very least suggests a possible deeper value retracement than now we have seen in months. There is no such thing as a query that I’m sticking my neck out with this warning contemplating that over the subsequent three days there may very well be information pushed volatility within the charges market that may doubtless overflow into the fairness markets. Key help is on the Kijun Plot (inexperienced line at 23,320) and second at Cloud help.
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