Monday, April 11th, 2016

Market divergences come home to roost

Yesterday we showed you the market divergences taking place in RUT the small caps and IYT etf  which is based off Dow Jones Transports. Both those weakenss spread to SPX and DOW itself and the whole market went down in controlled sell off. One of the things to note is that $VIX has not shot up yet. So there is very little fear out there. This could be one potent down day with bearish engulfing candles and we just have to see if there a follow through to the down side next few days.

LNKD and NFLX both fell hard. They broke their high level consolidation patterns and lapped into the shorts waiting below. The price action was fast and probably has more down side left specially in LNKD which could try to meet its 50 day line here , even though it is way oversold at this point.
NFLX on the other hand has pierced its 50 day moving average and is trying to go up as seen by a bottoming tail on the charts.

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