Further disconnect?

The price action over the last few days has shown further possible evidence of a disconnect in the markets.

I talked back in May and July about the possibility of a two way market developing. We have now seen further evidence of this in the US, as the Dow powered up to new highs in the last week while the broader Russell 2000 is mired in a range and, if anything, is trying to move back down the other way with a lower high in place (charts are below). These things never develop or fully show themselves in a week or two. They take time to develop, and as a result you can easily suffer a false start or two. I talked about this here.

There's no such pattern for the time being between the FTSE100 and the FTSE All-Share here in the UK - they are pretty much moving in step. However I've shown below the AIM All-Share Chart, which shows that a downtrend has been in place for several months now.