It has been said that pigs get fat and hogs get slaughtered. Nothing has been more awe inspiring during 2015 than the massive gains that have been observed in several key tech stocks. With seeming daily record highs in stocks such as $AMZN, $FB and others it is easy to get excited about further tech gains. They never go down after all, or the so the impression goes.

Yet I urge everyone, bullish or bearish inclined, to have a look at several key charts here as the context paints a very different picture. In recent weeks we’ve pointed to the ever increasing negative divergences in the market (see also technical charts). That goes without saying.

But it’s more than that. Have a look at the daily $NDX chart:

Not only do we have plenty of negative divergences, but we also just saw the recent rally fail at a key broken trend line going back to 2012.

Now put this in context of the monthly chart:

Here we find a broken wedge pattern going back to 2007 with recent highs having been made on ever lower participation as evidenced by the $BPCOMPQ. It is notable that this lack of follow through is observed at the levels of the 2000 highs.

This type of narrowing participation is not new of course and it is precisely the 2000 highs that came with similar negative divergences and weakening participation:

If you recall it was a narrow band of hyper valued and extended stocks that brought about the final highs in March of 2000, hence the negative divergences.

Well what do we have now? Check the following examples in context of their stretch on the charts:

All of them are either massively extended and/or show negative divergences in their own right. And these are the winners!

Now none of this means that a crash is imminent or that we can’t make new highs even into year end, however it points to a very diminished risk/reward to the long side as even new highs would print further negative divergences. What would change this picture is if new highs were to be made with a broadening participation of component stocks.

But if all these divergences mean something, and when they do, investors may find that we haven’t really seen a real correction yet. A look at some basic Fib levels could suggest a very rocky 2016:

Bottom line: Bulls need new highs with broadening participation.