Skip to main content

The Market May Be At All-Time Highs, but Be Wary of Divergences

Publish date:
Video Duration:

The market just keeps flirting with new all-time highs. 

But don't let the headlines distract you, there are still things to worry about that don't include impeachment, trade, etc.

Helene Meisler, who writes a daily technical analysis column for Real Money and writes TheStreet's Top Stocks newsletter, sat down with TheStreet to discuss what she's keeping a close eye on -- divergences.

So, let's take a step back, what divergences is Meisler seeing?

"Well, one of the divergences is breadth. Up until about two weeks ago, the advanced decline line had been leading the market on the upside. It broke out to new highs well before the S&P did, well before any of the major indexes did. But about two weeks ago it started to just work in lockstep, which was okay. And then about a week or so ago, it started to go down every day while the S&P sort of has ground higher, just a little bit every day. So...currently breadth is negative," said Meisler. "So if we close negative [Wednesday], it'll be six of the last seven trading days that breadth has been negative. That's one divergence. Another one is that the number of stocks making new lows has started to climb quite significantly. For example, for the last two days, NASDAQ has had more than 100 stocks making new lows. And this is with the market at all-time highs. So, even if we smooth it out and say, okay, it's just the last day or two, the 10-day moving average of stocks making new 52 week lows has started to rise. So these are just little niggling divergences that are, to me, problematic."

Watch the full video above for more. 

Read more on Meisler's take on divergences over on Real Money. 

Bull Market Fantasy: LIVE TUESDAY & THURSDAY @10:45AM

Subscribe to our Youtube Channel for more videos : Listen our latest Podcasts on Soundcloud

Catch Up: Today's Top News Videos Below

Related Videos