The composite indicator (2nd from bottom) of all time frames has started to show weakness in the trend that started in August of last year. The Dow has not.
Notice that my medium term indicator was "right" about the strength in October. Notice the Dow was not, but it caught up. Notice how the Dow is once again not paying attention.
I typically will not say markets are broken because I don't believe something is broken or wrong if it doesn't do what I want it to. The markets (humans) are always irrational so nothing is unexpected.
As Zerohedge pointed out, this rally can no longer rely on short covering for fuel. This mostly limits opportunities for panic buying into new highs as well as reduces the amount of people who would be buying (covering) into a steep decline.
You ever notice how when you get prideful, the universe, God, the earth, whatever always smacks you back into your place. I am noticing a lot of pride on behalf of the ECB lately for their LTRO efforts as well as some of our leaders. I'm not sure if humbling experiences are limited to the peasants like myself or not.
"I’ve walked across the sun. I’ve seen events so tiny and so fast they hardly can be said to have occurred at all, but you… you are a man. And this world’s smartest man means no more to me than does its smartest termite...
"I can change almost anything… but I can’t change human nature."