I'm not sure where to start with the bearish indicators in this market so I'll just list them in no particular order.
1. The NDX and S&P 500 are hitting MONTHLY 9-13-9 DeMark Sell signals. This basically happens about once a decade and it's very negative. The DeMark sell signals are being accompanied by overbought RSI signals as well.
Chart Courtesy Bloomberg
2. The NDX and S&P 500 are hitting DeMark sell signals on the WEEKLY charts as well.
Chart Courtesy Bloomberg
3. The Monthly sell signals in the NDX and SPX are being confirmed by sell signals in the DAX. Typically, big declines don't start unless you get DeMark sell signals across multiple time frames in multiple markets. We've got that now.
Chart Courtesy Bloomberg
4. The S&P 500 is approaching several levels of resistance and the NYSE is hitting the top of its trend channel.
Chart Courtesy Stockcharts.com
5. The standard deviation of the VIX has been a pretty good timing indicator over the past couple of years. Every time the 20 day standard deviation of the VIX has fallen to 0.50, it's signaled a minor top. It was at 0.45 this morning.
Chart Courtesy Stockcharts.com
6. The NASDAQ/NYSE ratio has hit levels that indicate excess speculation and have marked tops in the market in the past four years. The NASDAQ volume to NYSE volume ratio is a derivative of the NASDAQ/NYSE ratio. Typically, more speculative, high growth companies trade on the NASDAQ. As the volume on the NASDAQ increases relative to the NYSE, it signals investors are becoming more speculative. An intermediate market top forms if the speculative volume reaches an extreme. The opposite is true as the NASDAQ volume relative to the NYSE decreases. A decreasing ratio indicates that investors are fleeing for the safety of larger, more mature stocks that trade on the NYSE.
Chart Courtesy Stockcharts.com
I could go on, but I'll leave it at that. The indicators are telling me that at best we are in for a long Summer.
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