Nasdaq 100 And S&P 500: All The Negative Divergences In One Place

The Nasdaq 100 and the Standard & Poor’s 500 hit new highs again today, but the breadth measures are not confirming the action — again. That is, as the major indexes continue to slightly advance, such classics as the advance/decline line and the bullish percent, among others, keep fading.

It’s already amazing that this series of new highs combined with steadily worsening negative divergences just keeps unfolding.

It’s the recent heavy weighting of a select few outperforming big cap tech and social media stocks that causes the phenomenon. Now that Apple and Tesla are no longer trending upward, we may be close to the end of this.

First the price charts, then the negative divergences.

Here’s the S&P 500 daily price chart:

Note that the new high comes with a negatively diverging relative strength index.

The Nasdaq 100 daily price chart is here:

The new high is accompanied by a negatively diverging relative strength index.

The New York Stock Exchange advancing issues/declining issues looks like this:

Every time the major indexes score a new high — since November — there are fewer advancing issues and more declining issues. Same thing today.

Here’s the chart showing the percent of S&P 500 stocks above their 20-day moving average:

Note that even with new S&P highs, the percent has declined from November and December 2023 peaks.

The percent of Nasdaq 100 stocks trading above their 20-day moving average is also in decline:

The percent of S&P 500 stocks in bullish point-and-figure patterns is declining:

The percent of Nasdaq 100 stocks now in bullish point-and-figure patterns is declining:

It’s a wonder to behold how the strength of just NVIDIA, Meta Platforms and Microsoft keep the “new highs” going for the 2 major stock indexes and stoke the idea that all is well with the stock market when that’s not necessarily the case. Taken as a whole, minus the nutty valuations of a handful, problems are evident.