1. Sornette bubble end flagging and potential ending diagonal overthrow price pattern on SP500:
Source: Financial Crisis Observatory / my annotations
2. Dtrend flagging uptrend exhaustion:
3. P/e over Vix ratio at peaking level:
6. Junk bond spreads divergence as per the 2011 peak:
7. Biotech has made a 61.8 fib retrace of the decline from the parabolic peak, as a potential lower high per the bubble anatomy model:
8. Rydex data provides another example of the peak in leverage now being in the past, which along with margin debt should mean the markets are on borrowed time:
9. A geomagnetic storm hit at the weekend and we are heading into this coming Friday’s full moon: twin negative pressures on sentiment.
10. Economic surprises are negative in USA, Europe and China:
11. 75% of companies in the US that have issued earnings guidance for Q2 2014 have issued negative guidance.
12. Gold and silver short interest at levels suggestive of a rally in precious metals, which would fit with a decline in stocks.
In summary, it’s another compelling set-up. Whilst I cannot rule out stocks breaking higher and going crazier yet, I have to doubt whether sentiment, complacency and bubble/froth indicators really can get more extreme. As per my Sunday post, Piecing It All Together, my primary case is for this being the last piece of the topping process, particularly so in honouring the combined February peaks in the sun, in margin debt, and in RUT, IBB and COMPQ, i.e. lower highs here are important. If selling can initiate here, then exit will be through a keyhole due the lopsided all-in extremes.