an tSionna {Divergences}

Almost any index or ETF related to US markets have seen substantial rallies since mid-October.  But while major indices like the S&P 500 continue to make new highs others under the hood have stalled out.  See below.  All indices represented by ETFs.

Here's the S&P 500 ETF.  Notice it's continued to rally recently.  Having said that, the trading range has narrowed over the past week.

Here's the Russell mid-cap ETF.  Notice it's stalled for now at the highs it previously hit back in September.

Now here's the Russell small-cap index.  Basically gone nowhere in 2014.  Notice that it's not only stalled out near its previous highs but so far failed at or near resistance {that purple line on the chart} now for the 3rd time.

Wanted to flag this divergence as probability suggests that if this doesn't correct itself and begin to follow other major indices higher then this could be negative for stocks.  This is something we'll pay more serious attention to going forward.  For now hard to tell what this means and we'll let our indicators guide us.  Markets are overbought right now so that could also be a negative tell.  Will remind readers that seasonal factors often trump money flow analysis this time of year.

Not a recommendation to buy or sell.  Just simply stating what our indicators are telling us.

*Long ETFs related to the S&P 500 and the mid-cap indices in client and personal accounts.  Long ETFs related to small-cap indices in certain client accounts.

Two posts today but I'm out tomorrow.  Look for something here Thursday.

Charts via FINVIZ.com.