What we've learned over the past year and a half (or so) is that the trends in the stock market (a) don't tend to stick around for long and (b) change directions at the drop of a hat. So, with the S&P 500 having run +11.75% from the September 28 low and now flirting with fresh all-time highs for the umpteenth time this year, it is probably a good idea to start looking for Ms. Market to change her mind again.
So, in the wee hours of this fine Wednesday morning, I thought it would be a good idea to look at some of the potential warning signs that this rally may be getting long in the tooth - well, from a near-term perspective, that is.
On that note, please understand that I remain upbeat on the intermediate-term outlook for the stock market and have made my case fairly clear on several occasions recently. However, given the robust rally we've seen, a pullback in the 2% - 4% range wouldn't be surprising in the coming days/weeks. Here's why...
The Troops Aren't Following
The first "problem" to discuss from a short-term point of view is the simple fact that leadership is narrow at the present time. During strong rallies, all the major indices - heck, all the major world indices for that matter - tend to sing the same tune. But unfortunately, the small- and mid-cap "troops" are not following the "generals" (the blue chips) at this time.
The charts below tell the story rather nicely.
S&P 500 - Weekly 
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Point number one is the bulls have been on a joyride to the upside for more than a month now. And, in fact, the S&P 500 has recovered nearly all of the "China Freakout" correction that occurred from ...
