Yesterday, markets experienced strength continuation. The NQ8 stocks are still high. We can see below that there is a small negative divergence, but this is only due to the oscillation aspect of the Money Flow indicator.
The NQ8 MF is indeed above 2% and has no way to go other than down. Hence, a negative divergence offers new information.
The NQ100 Futures however show that investors are not chasing higher prices.
The S&P500 Futures also shows that higher prices are attracting sellers.
The small caps are now testing the upside limit of their small downtrend (more like a widening trading range, though.)
We can see below that after the indication two days ago of a possible oversold reversal (weakness was bought), yesterday we got an indication of an overbought reversal (strength was not bought).
On the interest rates and currencies front, yesterday I posted that the Yen was displaying a positive divergence, while the 10 Year Treasuries were showing an opposite divergence. The Yen had been right. This tells us that Japanese investments and Money Flow are maybe what matters most right now.
A weakening Yen tells us that Japanese Money is available to push US equities higher.
Conclusions:
Since markets are high ahead of two announcements, and since investors' behavior tends to point to a potential sell-the-news type of event, I believe that strength should not be bought today.
