Stock Market Nears the Moment of Truth

Chris Kimble
stock market indexes top peak divergence warning investors chart july 31 2019

Stock Market Indexes – Tale of Two Stories

As investors prepare for the Federal Reserve announcement today, they are feeling pretty good.

That’s mostly due to the performance of the “big 3” stock market indexes: the S&P 500 Index INDEXSP: .INX, Dow Jones Industrials INDEXDJX: DJI, and the Nasdaq INDEXNASDAQ: .IXIC.

As you can see in the upper half of today’s chart, all three are at all-time highs (1).

But that’s only half of the story. In the lower half, we have the Russell 2000, Dow Transports, and S&P Mid-Cap Indexes… and they are not at all-time highs. In fact, they are in downtrends (2).

So who is telling the truth? Will this divergence lead to a stock market correction? Or will the lagging 3 indexes play catch up? Stay tuned!

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