There's something fishy in Divergence Palooza

OK so I made the mistake of taking off my partial hedge today before the 7-8% jump in RKH.

I lost yesterday's gains for todays odds defying almost 6 days in a row gains in the SPY. blagh.

Can't beat the odds every single time, but man is it painnful seeing those hard earned profits being seperated by market makers.

I'm still convinced this rally is just market maker bullshi+ like in January's very long stretch, which shook me out because back then I went short half way into the rally too early as well.

The difference now is that I hedge on dips so I keep some of my gains from these nasty shake outs.

There are many elements that are missing in this rally, too much stuff really. This is especially true for Nasdaq:

Average new lows in the naz are diverging with VXN, its implied volatility index.

A downtrend in both is a solid bullish trend and vice versa. None of that happened today but we had a supposedly "broad" rally across all sectors.

52W lows are diverging as well. Some extremely bearish signal in the NYSE is not as bearish in the Nasdaq:

The sentiment in the options arena is also very confusing:

We are stuck between a downward trending channel in the PUT/CALL ratio yet we made a new low in the SPX AND in CPC ratio. Tops in CPC are common for bottoms in SPX and vice versa. This time the intermediate term trend is converging.

A new indicator that I've come up with is a relationship between total PUT/CALL ratio and Equity-only PUT/CALL ratio:

This indicator can sometimes be extremely wrong on timing, which is why it needs to be taken with a pinch of salt. As of the 666 bottom in SPX it signaled a bearish reversal signal of bearish sentiment by showing a lower peak than the one in January. Just another tool in the tool box for market timing, but its not the sharpest obviously.

Now for a sentiment indicator that visualizes the relationship between flight to safety vs. flight to risky sectors. XLU is considered one of the more stable sectors out there, at least more stable than other sectors, maybe even healthcare, but that would be controversial.

XLF is obviously the most risky sector.

When actual sectors and their bullish % indexes are divided, certain trends can be seen converging with the broad market, like SPX.

We have a very big spike in the bullish %'s ratio and its staying up there. That could be because of the sharp drop in Utilities lately which could mean that there is really a flight from safety or just sector-specific trouble like in healthcare, which is also a safety sector.

Only when looking back to this post much later, I'll really be able to tell if this is was the needle in the hastestack that revealed if 666 was the bottom of 2009, another intermediate bottom. or just another short term bottom.