The 21 day moving average of the McClellan oscillator is showing us what we already know - still overbought, but declining in overall strength.
I knew this move was extreme, but not this much. The summation index actually is outside its 2.5 standard deviation bollinger band. This is something that usually happens only to the downside as markets tend to move faster in that direction. Humans seem to build confidence much more slowly than they lose it. I marked previous times when it did this - only one to the upside on 5/5/2009 which is approximately six months after the monetary base doubled and "slowed" around 12/1/2008. The most recent large increase slowed around 6/1/2011, also about six months before now. I don't know if there is a direct correlation or not, just analyzing.
"Is there any reason why the American people should be taxed to
guarantee the debts of banks, any more than they should be taxed to
guarantee the debts of other institutions, including the merchants, the
industries, and the mills of the country?"
Senator Carter Glass during Senate debate on the Banking Act of 1933
(Glass-Steagall Act) [source: Rixey Smith and Norman Beasley, Carter
Glass: A Biography (1939)] - nowandfutures.com