Last time, we looked at the "technical divergences" evident in the current market from a big-picture standpoint. We compared the charts of the Dow, S&P, NASDAQ, Russell 2000, and S&P 400 Midcap in order to see if the major indices were all singing the same song. We noted that in a strong market, "the generals" tend to lead the market and "the troops" follow along.

In our review of the charts, we found that the Dow is in good shape and that the S&P 500 has largely confirmed the Dow's move to new highs. We noted that the NASDAQ appears to be diverging from a near-term perspective. We then found that the Midcaps were also diverging, but not nearly to the same degree as the Smallcaps. And finally, we discovered that the most glaring divergence can be seen in the Russell 2000, which is still suffering from this Spring's "momentum meltdown" (see below).

Dow Jones Industrial Average - Daily

Russell 2000 Smallcap - Daily

What Do The Sectors Say?

Since there are obviously divergences in the major indices, we thought it would be a good idea to dig a little deeper in order to see if there is a message to be gleaned from the underlying sectors. As such, next up is a review of the charts of the important S&P sectors.

Dow Jones Transports Index - Daily

The chart of the Transports index suggests three things. First, that the economy must be doing okay as it appears that the companies moving "stuff" around the country are doing well.

Second, the new high in the Transports index confirms the move seen in the DJIA.

Third, the confirmation of new highs between the DJ Industrials and Transport indices means the venerable Dow Theory remains on a buy signal. This is considered ...

Be sure to join me today at 4:30 pm edt - I'll be introducing the strategy we use to manage the risk of a bear market

There has been an awful lot of discussion lately about the existence of "technical divergences" ...

Yesterday's FOMC meeting remains a focal point for the global markets. Despite the late-day selloff in the U.S., global markets are higher overnight. In short, some analysts believe that the selling in the U.S. was overdone, particularly when considering that ...

Although the surprise move by the People's Bank of China to pump 500 billion yuan (approximately $80 billion) into the country's top five banks (a move that was the equivalent of a 0.50% cut in the country's reserve requirement rate) ...

The word of the day appears to be weakness. Asian stock markets are down across the board this morning in response to weaker-than expected FDI (foreign direct investment) data in China, which showed inflows hitting the lowest level in at ...

The big focus in the market last week revolved around the possibility that Janet Yellen and her merry band of central bankers may need to change their tune at this week's FOMC meeting. More specifically, the issue is if there ...

There can be little argument that the U.S. Federal Reserve saved the banking system and in the process, the global economy, during the credit crisis. In an intense time with the financial system seemingly coming apart at the seams, Bernanke ...

The President's new, more aggressive campaign against ISIS appears to be spooking investors in the early going today. Recall that it was less than two weeks ago when Obama said "we don't have a strategy yet." This appears to have ...

With Apple's big event out of the way, investors can return their attention to the more mundane issues such as economics, the Fed, and earnings. Today, there are a couple deals to focus on as well as industrial production numbers ...

In our search for value among various asset classes, we concluded that - generally speaking - stocks are fairly to slightly overvalued, bonds are extremely and historically overvalued, commodities in general and gold in particular, while not cheap by historical ...

There has been an awful lot of discussion lately on the topic of stock market valuations. Yale's Robert Shiller, who won the Nobel Prize in Economics in 2013, has been quite vocal with his view that stocks are extremely overvalued ...

It is said that differing opinions is what makes a market. If there is one thing we know for sure about the current market, it is that the disparity between the opinions of what "should" be happening in the market ...