The move down from peak has been uniform between the indexes. All 3 traced out very clear 5-3-5 zigzag patterns and dropped fairly equally. But since that low a few days back, the DOW actually made a new low since. The SPX and NASDAQ did not. Also the 2-3 day rally has diverged as the NASDAQ retraced more than the SPX and the DOW is lagging. You can see all three on the chart.

A fractured market is not healthy market as EWI likes to always point out. So its hard to say what the outcome will be, but its not a bullish configuration. In any regard, the DOW traced a very awesome 3-3-5 textbook expanded flat. It did not make a new high on Friday.

The end of the quarter “window dressing” may have something to do with the wide divergence.

What I am not sure of is my degree markings for the recent 2-3 day rally. Is it a Minor X blue wave back up and we await what form the Y wave will take? Or will the DOW rally while the NASDAQ pulls back and the SPX trades sideways and an X wave peaks for the DOW a day or so from now?

Regardless look for a continued fractured market (or not – in either case its a clue). If the NASDAQ drops 2% and the DOW only 1%, that means something. What just yet I am not sure. Either way the divergence paints a more bearish picture than bullish.