The Dow Jones and S&P 500 are diverging

America's Dow and S&P stocks indices are displaying different Elliott wave patterns. John C Burford explains why that matters to traders.

Although my favourite stock index for trading is the Dow, I do keep a close eye on the S&P 500 (and the Nasdaq), because sometimes they display slightly differing Elliott wave patterns.

And this is exactly what has happened in the S&P since the 14 May highs. So today, I will tell you why this is such a significant development.

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John is is a British-born lapsed PhD physicist, who previously worked for Nasa on the Mars exploration team. He is a former commodity trading advisor with the US Commodities Futures Trading Commission, and worked in a boutique futures house in California in the 1980s.

 

He was a partner in one of the first futures newsletter advisory services, based in Washington DC, specialising in pork bellies and currencies. John is primarily a chart-reading trader, having cut his trading teeth in the days before PCs.

 

As well as his work in the financial world, he has launched, run and sold several 'real' businesses producing 'real' products.