Things were looking good for the bulls early in the session. The S&P had surpassed Monday’s high and looked like it was set to make a new all-time closing high. But then Alan Greenspan had some choice comments about the Chinese stock market. I’m not sure if his comments started the selling but it certainly accelerated after his words his the wires. Here’s an intraday look at QQQQ (15 minute bars):
It looks pretty dramatic on an intraday basis but it wasn’t that big of a deal on the daily chart. The Nasdaq had the biggest moves which amounted to slightly less than a 1% drop from peak to the close and a 0.42% drop for the day. It’s now sitting on support after today’s bearish engulfing candlestick. The bearish divergence in stochastic bears (no pun) watching.
Despite the Greenspan effect intraday the S&P 500′s daily chart looks rather uneventful.
After finally breaking through that tough resistance around 835 the Russell 2000 is coming back to test that area as support. Like the Nasdaq, it’s also showing a negative stochastic divergence vs. price.
No changes
| Trend | Nasdaq | S&P 500 | Russell 2000 |
| Primary | Up | Up | Up |
| Intermediate | Up | Up | Up |
| Short-term | Up | Up | Up |
(+) Indicates an upward reclassification today
(-) Indicates a downward reclassification today
Lat Indicates a Lateral trend
The divergence you talk about in the indicators is important. You can also see price diverging in the RSI(pick your day count). Eventually the divergence will win out, but after that who knows. I think we go higher.
Mike, do you trade the Chinese market as well?
You’re probably right StockRake.
I.S. — No, I only trade U.S. listed stocks on U.S. exchanges