$AAPL, the largest tech stock on the planet, pounds out a revenue warning and $NDX makes new all time highs. Ha ha.

Poor bears, if you can’t take advantage of the shutting down of the 2nd largest economy and a revenue warning from a $1.4 trillion market cap company and not even manage a single down day in tech, what will it take or so sentiment goes.

This market is impervious to anything. So it seems anyway.

However, fact is, bears are steadily chipping away at the foundation of this liquidity fueled rally. Yesterday again the Fed flooded markets with “temporary liquidity” as they like to call it.

Despite the Fed claiming to slowly reduce repo, $78.5B in repo before market open is still a whopper by any definition.

And besides: Whats temporary about this?

The @federalreserve is a mere $23B away from an all time high in treasury holdings. pic.twitter.com/bFo4m06iaD

— Sven Henrich (@NorthmanTrader) February 14, 2020

Short answer: Nothing. The Fed keeps expanding its treasury holdings and yes the yield curve inverted again:

The greatest economy ever requires ungodly sums of liquidity to keep markets from selling off.

But none of these efforts can hide the cracks that are taking place underneath.

Cumulative internals on Nasdaq suggest the same pattern we’ve seen over and over again preceding larger corrections:

The final highs coming on marked weakening in the cumulative advance decline issues.

For more confirmation check the percent of $NDX components above their 50MA:

Declining again as $NDX keeps squeezing out new highs. For now.

And, as a reminder, all this is happening with $NDX more than 400 points above its monthly Bollinger band:

Tops are processes and this process here seems intent to squeeze every last drop out of this rally.

$NDX keeps making new highs on the surface and bulls are celebrating. Beneath the surface bears are chipping away at the foundation.

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