Folks, no one indicator works as a stand-alone. In trying to gauge what is in store for markets we have got to go with probabilities and to build a case for a certain probability we need data points.
We have been noting that market sentiment is back to briskly over bullish, just as it was prior to the October mini correction. Now we can add to that the market participation indexes that we used to gauge the October correction as well. The same type of negative divergences are forming that we followed into the October correction. More to come in NFTRH 317, but I wanted to get this interesting, and contrarian bearish view in front of you today.
Here are four items, the SPX, OEX, NDX and INDU. Several others, like Healthcare, Materials, Utilities, etc. sport similar divergences.