BROAD STOCK MARKET UPDATE (5:30 pm EST)
"Santa Claus" rallies on Wall Street often peak a day or two after the New Year's Day holiday. The S&P 500 and especially the DOW are surging to new all-time highs today; however, the NASDAQ is falling steeply today, and it hasn't made a new all-time high (it hasn't even made a new weekly high). This is a strong bearish divergence signal between these indices. We could see a significant correction starting now in all three indices (unless the NASDAQ snaps back sharply and rises to make a new all-time high over the next several days). We are now holding a short position in the NASDAQ and will maintain that position as long as prices stay below last week's high (15,902).
"Santa Claus" rallies on Wall Street often peak a day or two after the New Year's Day holiday. The S&P 500 and especially the DOW are surging to new all-time highs today; however, the NASDAQ is falling steeply today, and it hasn't made a new all-time high (it hasn't even made a new weekly high). This is a strong bearish divergence signal between these indices. We could see a significant correction starting now in all three indices (unless the NASDAQ snaps back sharply and rises to make a new all-time high over the next several days). We are now holding a short position in the NASDAQ and will maintain that position as long as prices stay below last week's high (15,902).
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