There are two pattern recognition configurations that bear watching very closely, they are racing toward a pivotal juncture in the U.S. stock market. The first is a clear five wave Elliott Wave advance in the Dow and S&P from the December 2016 lows. Five waves = terminal pattern.
This is being accompanied by a clear divergence between all time highs in Dow, S&P, Nasdaq, NYSE, Russell 2000 and the FANNG group for a quintuple non-confirmation. (FAANG = Facebook, Apple, Amazon, Netflix and Google). In other words, the FAANG stocks that have propelled the market since 2012 with a nearly vertical trajectory are no longer making new highs, i.e., they are no longer market leaders. They have for the most part gone sideways or down.
The confluence of the broader market's five-waves up with the FAANG non-confirmation spells trouble, we just don't know exactly when. Actually, we do. When the broader indexes named above start breaching their respective blue trend-signal lines, that is when.
We are heading for one hell of a ride in the months ahead.
The FAANG Divergence
First charts the Dow and SPX, a good proxies for the general market as it continues making new all-time highs. Below those are the FAANG charts. See for yourselves, something is going on...or wrong.