By We were perusing the Advance-Decline Line charts that we have and noticed something that surprised us. The Nasdaq Advance-Decline Line is trending lower while prices continue higher. This is negative divergence we didn’t expect to see.
What makes that negative divergence even more interesting is looking at the same Advance-Decline Lines for the SPX and NYSE. Notice there is no negative divergence at all, if anything we see confirmations of the rallies both are experiencing.
Conclusion: We haven’t seen any issues with the Nasdaq rally, but this negative divergence could be signaling that the Nasdaq will be the first to show price weakness.
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