I noted the slope in the NYSE bull % index yesterday on stocktwits yesterdayhttp://stocktwits.com/AaronJ. As you can see this is a significant change in character from all the other bull market rallies since the major lows of 2009. This simply tells us there are fewer charts standing on firm ground. To make the analogy literal imagine trying to run up a hill with sand up to your knees.
I'm particularly concerned with the Nasdaq Composite bull % index. Notice during this summer rally the index has bounced around the 50 level after falling from the bullish 70+ area. When these bull % charts bounce around the 50 level after it leaves an extreme, it tells you the larger trend is changing.
Looking at the summer of 2010 you can see the indices did this same dancing. The key difference was the indices were consolidating and not advancing. You can also see the bearish divergences between the bull % indices and price of the markets have been building for years.
It is safe to say this evidence is a concern to the longer term bull case. My hypothesis is the major indices will double top if these indicators don't significantly improve(note it is just a hypothesis). However, there are strong bullish seasonality factors currently in play and we need other evidence to act on any hypothesis. At this point, who knows when the music stops?
***Update*** 3/5/13 Obviously this was poor interpretation of these indicators and we will try our best to keep this kind of crap off of the site in the future.
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