Some Thing is wrong with the market.......?

It would seem that an awful lot of technicians are paying close attention to the markets these days as many of them picked up on some unusual action yesterday. While the market was rising, ever so slightly, the VIX (volatility index) which normally moves inversely to the markets price, actually was rising as well. The other measure of risk that I follow is the yield on the Ten Year Treasury and it tends to be coincident with  prices, but it was falling. Both suggest a divergence may be occurring which might set up a top in the next few days to a week or so. Divergences are normally a good indicator that a change in trend is near.

Given all the geopolitical problems and technical issues with the Market you would think that there is no where to go but down. The 500 lb. gorilla in the room still remains the FED. Right now I suspect that the only reason for the market rallying is the rumor of the imminent roll-out of QE3.  There are all kinds of headwinds for this market but the market will do whatever it has to do to inflict maximum pain.

Here's the SP500 weekly index. Notice the red box in the upper right hand side of the chart. That's were we expect the index to top - close to the 1350 area. Once the top is in place we can expect to see the move towards 600 to begin. If the index is able to push through the 1375 resistance on strength then all bets say we are likely to see 1500. Hold your bets until the Market tells us which way its going.