The market is now overbought as seen in the chart below. However, the current overbought reading is weaker than the ones we saw earlier in the rally. This points to a loss in momentum, otherwise known as a negative divergence. A strong overbought reading has positive medium term implications as it speaks of a market with a lot of underlying strength.
There is also a negative divergence in the number of new highs. On November 4 there were 569 new 52 week highs on the NYSE. During the current rally the highest reading was 431. Even though the market has made a higher high, the number of stocks participating has decreased.
In addition to the sentiment extremes we now have an overbought market with negative divergences. While this is the season to be jolly everything else is in the bears favor.