Good point,about momentum slowing.Usually use multiple moving moving averages{4,EMA},Alan Farley calls them,I believe "MAR"=moving average ribbons.To use recent examples INTC,BRCD,PSFT are up much better than the QQQ s,on the 30 minute,10 day charts.{measure momentum with MAR,easier}
I like to keep a good conspiracy going. These links are from a google search on the subject. If someone is manipulating it sure is helping my retirement account so I can't complain.
When the market was near the bottom a month ago the evil empire (media, Goldman, funds, etc.) was reccommending that people hold off or go easy on their stock purchases for the time being because it was too early to tell if the early rally was going to be a sustained one. My as of yet only slightly developed instincts told me that they believed that the market was going to be headed up for the long term and wanted to and are quietly establishing long positions, which is what is causing prices to go up. Don't really care though because I don't invest, I trade.
I'm just reading this stock trading thing. I remember from reading one book that MACD is used mainly for identifying/following a trend, for trend reversal/divergence you need to use other indicators such as williams%, RSI, etc.. Correct me if I'm wrong, I just read a couple books and trying to learn.
I have found it useful to simply assume that the markets are largely random. Using words like "manipulated" implicitly places blame on others when things don't go as expected. There are multiple forces in the markets much stronger than any individual (fed, large program trades, cnbc, upgrades/downgrades etc) all of which affect the markets. To call that "manipulation" is not constructive - simply view it for what it is ... the market in action.
I will offer the same explanation I offer for most technicians...the market is not predictable and just because you have seen certain patterns historically, does not mean that the market is performing that way for any particular reason. A simple explanation is the basic support/resistance levels for a single stock. Often times, even though it shows up as cool trough, thus making for good trading (and yes we do use all of that information), the reasons for the support and resistance may be as simple as "divident yield" at the lower end, and "interest rate pricing" at the upper end (where fund managers are taking their money out of the stock because the price has outgrown the divident return and are moving money to interest bearing funds. Anyway, I will go along with you all that the Fed can have an impact on the market, as can many other things...thus it is impossible to predict with any certainty. This makes trading possible in the first place.
While tempting, it's just not rational to think that there is a big conspiracy out there. In the past, I would find myself thinking that the "powers that be" were buying stock just to get prices high enough so they could short them, or vice-versa. It's a crazy thought just trying to reason out why a stock was going against me. While it does seem that there are those with more money than God that can move the markets at will, it just doesn't make sense. There are many forces out there and markets are moved by everyone's collective self-interest. And, if there is a conspiracy, learn to trade with it! Take the recent rally as an example. As a technical trader (of course with some fundamental incling), can I figure out why the market has been racing and continues to advance without much positive new on the economic or earnings front? No, I just follow the prevailing trends and even the micro movements. I learn to trade the markets regardless of where they go. Like the little birds that pick the bugs off the water buffalo in Africa. They have to go where the buffalo are and where the bugs are. It is the stubborn, hungry bird that insists that the bison shouldn't be over there by the watering hole but rather over here under the trees. Trade the conspiracy!
Fast, I think you are using the indicator incorrectly. It told you that the index or stock had lost momentum, nothing more. A divergence is not a prediction that price will fall, only a warning that a meaningful change in trend is possible. That is why technical traders use a confirming indicator such as a trendline break to enter the trade. It is not unusual for MACD histogram to give many false divergences in a strong trend move. That is one reason I don't use it myself. It is pointless to speculate if conspiracies exist, but it can be worthwhile to take note of the effects such conspiracies would have and position yourself accordingly. Certainly there are powerful forces that do not want a catastrophic market collapse.