The High Low Logic Index has issued a sell warning as of today. The index takes the lesser of the number of new highs or new lows and then divides by the total number of issues traded. When the index is high (>2.0) it indicates that there are a large number of new lows relative to new highs which is not consistent with the continuation of a rally. Today the number of NYSE new lows hit 169 - almost as high as at some of the market lows over the past year. This is a very strong indication that the market is breaking down internally.
The past signals shown above resulted in the following corrections:
Signal Date/Correction Period
4/26/04 3/5/04 to 8/13/04
9/22/05 8/3/05 to 10/13/05
7/18/07 7/16/07 to 8/16/07
10/25/07 10/11/07 to 3/17/08 (first leg down)
Note that while sometimes the sell signal was late, in every case the correction continued for a period of at least 3 to 4 weeks after the signal and in no case did the signal come earlier than the top. This suggests to me that today was likely the top of the rally, but these are only 5 past cases so it is hard to draw conclusions about that. Even so, the top is likely very near and a correction at least 3 to 4 weeks is imminent.