For US equity traders and investors these are worrying times, as the NQ emini continues to blast its way ever higher, and leaving its sister indices becalmed and lacking direction, with the ES emini a classic example.
Some are born to lead and others to follow, and the NQ emini has once again regained its rightful place as leader of US equity markets, following a period when it has been lagging behind its two sisters.
Like nervous students awaiting their end of year exams, so the major US indices are all approaching new high ground with equal trepitation, with the ES emini (SPY, quote) a classic example of the tension that is now building on the daily chart.
As we move to the end of another trading month a feature now building in US equity markets is the apparent disconnect between the three principal indices, and in particular the divergence between the NQ, which appears to be moving South, and the others which are moving North.
Bullish momentum for US equities remained firmly in the ascendency last week as bullish sentiment for the US dollar continues to weaken, and further extending the rally of the turbulent start to the year which saw major buying by the insiders as a result.
As we move towards the end of the first quarter of the new year, it is interesting to consider one of the more subtle changes to the principle US indices that appears to have passed by unnoticed,
It’s been a period of pause and reflection for equity markets, following the picture perfect price action of August, as the up elevator finally reached the next level, rolling gently over into the current phase of price congestion.
In a post several days ago, I described the recent price action for the major US indices as perhaps the most elegant we have ever seen, arching higher through August and into early September before reaching a plateau.
Price action on the major US indices yesterday could best be described in one word, indecision, with all of the Emini futures closing with a doji candle of one variant or another.
