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Strategies & Market Trends : MDA - Market Direction Analysis
SPY 665.67-0.9%Nov 17 4:00 PM EST
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To: chartseer who wrote (22462)8/8/1999 11:35:00 PM
From: Smooth Drive  Read Replies (1) of 99985
 
Hello Seer,

>>Do you or anyone else have any opinions as to why there is so much divergence between the NYSE Composite and the DJIA(DIA)?<<

The DJIA 50 X 150 chart:

11300           *
11250           X *
11200           X O *
11150           X O   *
11100           X O     *
11050           7 O       *
11000           X O X       *
10950           X O X O
10900   X       X O X O
10850   X O X   X O   O
10800   X O X O X *   O 8   X
10750   X O X O X   * O X O X
10700   X O X O X     O X O X
10650 O X O X O X     O * O X
10600 O 6 O X O X         O 
10550 O X O X O X           *
10500 O X O X O
10450 O   O

The NYSE Composite 2 X 6 P&F chart is as follows:

664                   *
662                   X *
660               X   X O *
658               X O X O   *
656               X O X O     *
654               X O X O
652               X O   O
650               7 *   O
648               X   * O
646               X     O
644               X     O *
642               X     O X *
640 O             X     O X O *
638 O         X   X     O X O
636 O     X   X O X     O   O
634 O     X O X O X         O
632 O     X O X O X         O
630 O     X O X O X         O
628 O     X O X O X         O
626 O     X O X O X         O
624 O     X O X O X         8
622 O X   X O X O           O
620 O X O X O X             O
618 O X O X O               O
616 O X 6                   O X
614 O                       O X
612                         O X
610                         O X
608                         O

The DJIA topped at 11250 on 7/19/99 and reversed down on 7/20/99. The NYSE Composite topped at 662 on 7/19/99 and reversed down on 7/20/99.

Seer, I guess I'm not following your question. There's divergence, convergence and confirmation. If the NYSE Composite where depicting lower tops and bottoms, while the DJIA was depicting higher tops and bottoms -- then the NYSE Comp would be be diverging from the DJIA. That's not happening. In the above, they are confirming each other.

Even though they are confirming, the DJIA is down approximately 4% and the NYSE Comp is at 7%. The 30 big time blue chips that make up the DJIA haven't taken the hit (yet) that the broad NYSE market has.

Take care,

Eric

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