DJIA Making new highs, HOWEVER! LOOK AT the Transports? are they confirming up here? Today not yet 5209 Transports level to watch. And a break out over 5226. So far today the Trans are showing negative divergence. Secondly look at the Baltic Dry Index at 2008 lows. Also NASDAQ looks like resistance here. Prior late October highs. Also for move higher ES needs to close ABOVE 1297.50. Notice ES DAILY MACD October 28th HIGH, MACD TODAY is LOWER while ES makes new highs. Divergence. ES Stochastics are overbought on daily and on weekly. SPX 1307 (1302 ES) is a 78.6% FIB for 2011 Range. Another negative divergence VIX has not broken 20.98 low on 1/11/12. Another area of risk apeitite, HYG (high yeild bond etf) put its high on 1/3/12 and looks like maybe possible H&S on hourly. I didnt attach the charts but please feel free to look at these charts to confirm this analysis.
I think it is too early to call the daily ES pattern a divergence with the MACD. The market is in the second leg up off the powerful October divergence. I agree it warrants close monitoring, but it will have to turn down to put in a divergence. If the market continues to rally, MACD could confirm. I view divergences as an indication of market condition rather than a timing indicator. I always want to see price confirm the divergence, ie by breaking a trend line or MA, before trading on it. I am impressed by all the other divergences you cited. I just do not know how to use them. Generally in a real bull market we would expect small stocks to lead, not the S&P 500, so that is a bit troubling. Today however the NQ is rallying about twice as much percentage wise as the ES or YM, so maybe the small stocks can catch a bid here and confirm.
I agree i would like to see MACD roll over as well as stochastics to confirm. those indicators are just more caution. However the Transports are important in my opinion. As well as this area of resistance 1300-1320 in SPX breaking back below 1290 in the ES could send us to test 1280 again.