Index Divergence Signals Potential Market Pullback

TRIGGER TRADES
01-06

The indices continue to diverge.

While $Dow Jones(.DJI)$ blasted to a new high, likely completing a final fifth-wave, $S&P 500(.SPX)$ rejected at resistance and $NASDAQ 100(NDX)$ was so weak it couldn’t break the prior day’s high.

Watch Level: Short to 6720–6550 triggers on a daily close below SPX 6816 and/or below last week’s low.

A daily close below 6816 would confirm the sell signal toward 6550 - a break of Friday’s low likely seals the deal.

The larger implication: A loss of 6650 confirms the start of a major Wave 4 correction, with downside scope toward 5500.

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