SPY/DIA Volume Divergence
Divergence continues to build between buying volume and valuation in the combined SPY/DIA chart. I believe this indicates buyer fatigue in the sectors that have seen a bull run after the tech selloff. This, along with TNX jumps continuing to drive the IXIC down, could indicate imminent trouble in the general markets. It doesn't seem that the SPY/DIA can keep up enough to counter balance the drops in the IXIC to maintain overall market stability.
If the TNX continues to rise and the IXIC continues to be driven down, I believe the SPY/DIA will eventually break the bullish trend and begin its own pullback, which could cascade into a full market correction or worse.
If the TNX flattens out and stabilizes, I will be looking for the IXIC to double top, failing to break past its last peak, which will indicate that the market is not as strong as it has been. This could likely cause a rush of fear selling, causing a sharp decline, which would cause margin calls, with further downside. The SPY/DIA will most likely be dragged into this fear and downward momentum as they are still trading 17% above their last pre COVID support.
This is further supported by the monthly IXIC indicating it being overbought on RSI and Stoch 14/3/3, along with the February candle forming a shooting star, and March forming a hanging man so far, both indicators of a bearish reversal.
I will be looking to maintain liquidity past the week of 3/15, and planning on shorting the QQQ in the event of a double top as well as buying into UBT in the event of a full market correction or crash.
If the TNX continues to rise and the IXIC continues to be driven down, I believe the SPY/DIA will eventually break the bullish trend and begin its own pullback, which could cascade into a full market correction or worse.
If the TNX flattens out and stabilizes, I will be looking for the IXIC to double top, failing to break past its last peak, which will indicate that the market is not as strong as it has been. This could likely cause a rush of fear selling, causing a sharp decline, which would cause margin calls, with further downside. The SPY/DIA will most likely be dragged into this fear and downward momentum as they are still trading 17% above their last pre COVID support.
This is further supported by the monthly IXIC indicating it being overbought on RSI and Stoch 14/3/3, along with the February candle forming a shooting star, and March forming a hanging man so far, both indicators of a bearish reversal.
I will be looking to maintain liquidity past the week of 3/15, and planning on shorting the QQQ in the event of a double top as well as buying into UBT in the event of a full market correction or crash.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.