Look up, “tired bull,” in your trader’s almanac and you will find this picture of the Dow Jones Industrial Average:
The VIX, which I have discussed here ad nauseum, also continues to diverge strongly from the index. In stark contrast to the market’s new highs, it stands a solid 25-35% above its recent lows and consistently finds support at the key 12.5 level refusing to break down.
On a longer time-frame, Jason Goepfert of SentimenTrader reports tonight that the current reading in the weekly MACD for the Dow is just about as high as it gets. In the past, once the indicator has crossed down from this point, it has lead to an average decline of roughly 5%.
Will the Street of Dreams become the Boulevard of Broken Hearts? I wouldn’t bet against it.
The writing’s on the Wall.