Options Wonderland

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Breadth Negative Divergences: While we have bullish sentiment following the seasonal pattern, the bullish sentiment with the recent gains only adds more risk to downside unless we are heading to extreme case of a Bubble-Crash scenario. For example, $NAMO weekly is showing negative divergence since Oct peak making lower-high which is an early signal of internal weakening sign of this rally while late buyers are chasing the recent rally momentum.



A/D negative divergence is another example of negative breadth as shown on the chart with 10day MA which made a lower high after the initial peak in Oct, lower peak in Nov confirming other breadth negative divergences that I commented during the last week.




A huge negative divergence on $NAA200 showing that less stocks are trading above 200ma, meaning that a few momentum driven stocks are taking markets higher which is a sign of unhealthy market.






$NASI Daily is rolling over with negative divergences as with the weekly chart. This can be seen through many stocks are selling off while a few big stocks such as AAPL and GOOG perform well.