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Forget What The Bulls Are Saying: Red Flags Are Surfacing

Read More : http://www.investmentcontrarians.com/stock-market/forget-what-the-bulls-are-saying-red-flags-are-surfacing/1988/

The Ben Bernanke-driven stock market rally continues in full force and is unabated, but I really question the rate of the advance and believe stocks remain overextended at this juncture.

The S&P 500 made another record high above 1,600 last Friday, but making that move to above the magical level came slowly and cautiously, which makes me feel somewhat uneasy.

The breakout-above the multiyear top near 1,565-is positive, as shown on the chart below, but the move was associated with light volume, which suggests a bearish divergence, based on my technical analysis.