Both S&P500 and Nasdaq made new all time highs yesterday, however, this move hasn’t produced any meaningful follow through today. Whenever a break out into the new all time highs doesn’t attract new buyers, this should be taken with some caution.
If market continues to drop tomorrow, both indices might form Bull Trap patterns. Should this happen, NQ might drop below 13800 while ES – below 4175.
NQ and ES, daily charts
On top of a potential Bull Trap pattern, the indices formed Bearish Divergences with the technical and breadth indicators.
ES, TRIX and TTM Squeeze, daily
NQ, TRIX and TTM Squeeze, daily
SPX formed a bearish divergence with the S&P500 Bullish Percent index.
BPSPX and SPX, 2020 vs 2021