For years, analyst and market traders have been carefully watching for negative divergencesas a clue to when a trend reversal was going to occur.

In fact, many professional traders have sold positions and gone short in the past, based on negative divergences.  From a technical analysis viewpoint, they expected that "when negative divergences started appearing, that break-downs in the binding-structure of a rally were also going to start occurring".

But now, many of these same traders are getting hurt because the "negative divergences are not kicking in".   

So what is going on?   Are negative divergences now meaningless and powerless, or is there some other force that will negate the power of a negative divergence?

The answer is yes, there is another force that will override the power of a negative divergence.   As many know, there have been a plethora of negative divergences show up in the past few weeks.   In spite of that, they did not trigger a reversal in the market. 

So why is that ?    It is because the levels and trending of "inflowing Liquidity" overridethe power of any negative divergences.  It is because negative divergences will NOT"trigger" with expandinglevels of inflowing liquidity. 

It isn't until Liquidity levels pull back in the face of lingering negative divergences that a market pull back finally occurs.  When inflowing Liquidity is in Expansion territory and at a high rate of expansion, the market continues to move up in spite of any negative divergences.