• A 2 to 4 percent correction due
• Advisor Sentiment added to Bear side

Important market divergences suggest a correction is imminent. Today’s new high in the Dow was not accompanied by a new high in the cash S&P 500 index.

While the Dow has continued to make marginal new highs over the last six trading days, both NYSE breadth and volume have been negative on 4 of these days.

I still expect new all time highs on the S&P 500 index but expect to see a pull back from current levels first. The Dow Jones Index is extended 2.5% above its 21-day moving average and 4.5% above its 50-day moving average. A two to four percent pull back in price would still leave the market in an uptrend and present an excellent buying opportunity.

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Posted by Michael Chapman at 2:26 PM PDT