Chart of the Day - Thursday, July 2nd, 2020

Today’s Chart of the Day was shared on Twitter by Willie Delwiche (@WillieDelwiche). The Nasdaq closed at an all-time high for the fourth of July! As we know, new highs are just about the most bullish thing that can happen. However, Willie points out that market internals have been deteriorating over the past month, while price has been printing new highs. Momentum indicators, like the MACD (above), and RSI (not shown), have been negatively diverging from price. Breadth indicators like the % of stocks above their 50, and 200-day moving averages have also been weakening. Bulls want to see these breadth and momentum indicators hitting new highs along with price, rather than diverging like they are now. It's hard to be aggressively bearish with price hitting new highs, but it's important to be aware that there are signs of weakness under the surface.