Just as I was getting ready to throw in the bearish towel, the market hit R1 today (not exactly, but at 3 points, close enough), and although it stayed there most of the day, finally and very abruptly began to drop. I retrieved this chart a little earlier than usual, so don't be fooled by the low volume, it is sure to be revised higher. It is too early to start gloating, and i won't anyway, because Yellenitis can start up again at any time. However, it looks like we may well be headed for the now overdue correction (and buying opportunity) I have been waiting for all year.
As soon as the Nasdaq started lagging on the fist of October, it was pretty obvious we were in for some weakness. The only question was how bad it was going to get and how long it was going to go on. We have a partial answer now; longer and worse than we initially thought. This is not getting better, it is geting worse, and that is not going to do much for the bullish case.
The Russell 2000 was trying to reverse a down trend in price relative and almost did it, but that reversal is now on the verge of failure. Watch for it to break down below the prior low; if it does, it's a very good indication that we are in a correction.
One day down after a breakout and rally does not make a trend, but the market is following script, and it does appear, to me anyway, that it has topped out for now. It has been flashing warning signs since early October, and this may be the first shot in the bears' attempt to gain control of this market.
I will have the new highs update shortly.