Wednesday, October 26, 2011

NDX is the laggard now

For a change NDX is lagging DOW and SPX.

As I type, EZ debt solution has been reached via EFSF leveraged to E1T, and Greek 50% haircut agreement.
ES, YM, and NQ are springing towards YH. But while YM just broke out to new high and ES is almost there by 2 points, NQ is 1.5% below its recent high. I am not sure if this is highflyers' (AMZN, AAPL, and NFLX) earnings debacle finally weighing NDX down, or simply the fact that leadership is about to change going forward. We also need to see if perhaps this is yet another one of this year's many non-confirmation fakeout moves.

Divergence has been the best contrarian indicator this year. It was SPX and DOW who did not confirm NDX a few times. NDX is returning the favor this time. Lets see what happens during the cash session tomorrow.

Update Oct 27 11:05 am
NDX printed a new high and quickly sold off. Slow stochastic on daily is no longer embedded in overbought. Stay tuned for further updates.

Update Oct 27 2:00 pm
NDX is now above YH. It is playing catchup still, up about 0.5% less than SPX. There is no place to hide for bears, they are simply crushed today. The only question I have now - when am I going to get my credible pullback below 1200 on SPX to reload the long? Does not look promising, but better than being short. Flat and mad! LOL 

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