Is It Time To Go The Other Way (Again)?

What we've learned over the past year and a half (or so) is that the trends in the stock market (a) don't tend to stick around for long and (b) change directions at the drop of a hat. So, with the S&P 500 having run +11.75% from the September 28 low and now flirting with fresh all-time highs for the umpteenth time this year, it is probably a good idea to start looking for Ms. Market to change her mind again.

So, in the wee hours of this fine Wednesday morning, I thought it would be a good idea to look at some of the potential warning signs that this rally may be getting long in the tooth - well, from a near-term perspective, that is.

On that note, please understand that I remain upbeat on the intermediate-term outlook for the stock market and have made my case fairly clear on several occasions recently. However, given the robust rally we've seen, a pullback in the 2% - 4% range wouldn't be surprising in the coming days/weeks. Here's why...

The Troops Aren't Following

The first "problem" to discuss from a short-term point of view is the simple fact that leadership is narrow at the present time. During strong rallies, all the major indices - heck, all the major world indices for that matter - tend to sing the same tune. But unfortunately, the small- and mid-cap "troops" are not following the "generals" (the blue chips) at this time.

The charts below tell the story rather nicely.

S&P 500 - Weekly

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Point number one is the bulls have been on a joyride to the upside for more than a month now. And, in fact, the S&P 500 has recovered nearly all of the "China Freakout" correction that occurred from ...

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Good News/Bad News From the Volume Front

I start my day each morning by reviewing about 40 different stock market indicators, models, and then a host of charts. To be honest, not much changes on a daily basis. However, it is important to remain diligent in this ...

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Understanding How Ms. Market Thinks

A great many investors (professional and amateur alike) follow a similar process when considering how to invest. They start the process with their take of the economy and then go from there. The general consensus here is that earnings drive ...

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If You Are Scratching Your Head...

After the usual post-Fed announcement hysterics, stocks stepped lively Wednesday afternoon and finished at the high of the day. For those of you keeping score at home, the S&P 500 is now more than 11% higher than where it closed ...

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Some Very Scary Pictures

It is getting to be that time of year when it is oh so tempting to incorporate the season into the titles/themes of stock market commentary. While I usually try to avoid being trite when conjuring up my oftentimes meandering ...

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Mood Swing

What a difference a week or so makes. Seven trading days ago, most everything I read had a negative bent to it. Everyone was just SO sure that the stock market would bump its head on the obvious resistance level ...

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Scratch That. It's Still All About...

In yesterday's missive, we opined that the near-term direction of the stock market was being driven by (a) oil and the related global growth concerns, (b) the state of the earnings season, and (c) what the central bankers of the ...

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Sifting Through The Tea Leaves

As I have likely mentioned a time or twenty, the purpose of my oftentimes meandering morning market missive is to (a) identify the primary drivers of the market action, (b) ponder the important questions/issues facing the market, and (c) to ...

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The Catalyst Is Clear, The Direction Is Not

If the action seen over past couple weeks has told us anything, it is that (a) the worries over global growth have dissipated and (b) there appears to be some trepidation over the state of the current earnings season.

The ...

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False Alarm

The big rally seen over the last two weeks took many in the bear camp by surprise. Just when our furry friends thought stocks were ready to break down and embark on a new leg lower, a 7.1% rally in ...

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Don't Look Now, But There May Be Reasons For Optimism

The question of the day remains largely the same at this point in time: Have we seen the lows of this move or are the bears about to retake control of the market again?

To be sure, there are lots ...

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If I Were Stranded On A Deserted Island...

Up until a few days ago, it looked like the bears were going to win the day. But then again, this is what "retests" are all about. The worries return to the market, the selling intensifies, and everyone in the ...

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