A diary of the thought process behind my investment decisions
The technical term for what I mentioned in my last post is divergences. Divergences tend to lead to market tops. While the major averages are doing well, the average stock is not. Among the divergences are:
The Russell 2000 is well off its highs.
Momentum is waning. The last two highs have occurred with lower overbought readings.
Market leaders like semiconductors and financials are not making new highs while the major averages are.
The evidence is lining up to push me towards a net short position at the end of the week.