Charles Malay, a longtime trader, has a very nice blog. His view on the markets can be summarized as follows:
# The Market PE is historically overvalued. The Current PE is @ 17 on the S&P.
# The Stock Market is overbought when measured by the number of stocks above their 50 day moving average lines.
# Bullish Sentiment is high. The Daily Sentiment Index (DSI) hit 89%. This reading is the same as the Oct 2007 high.
# Investors Intelligence, AAII registered 19% bears. This is the same reading as the time high reading.
# The trading volume is poor. There is less volume on each push up.
# Insiders are selling at 28 times the amount they are buying.
# September is traditionally a tough seasonal month. 17 out of the last 20 years have been down.
# Markets have rallied up over 50% off the bottom in 5 months. This is the farthest and fastest in history.
# The NASDAQ 100 has retraced over 50% of the decline off the all time highs.
# The SP has retraced 40% of the decline.
# The Aug 24th high was not confirmed by the 24 day RSI and MACD reading creating a divergence.
# The Shanghai index has dropped over 20% from the highs. This market bottomed before our markets and led the U.S rally up.
# 25% of NYSE volume recently has been FNMA, Freddy Mac, and Citicorp, all low price stocks that the public buys. (speculation)
# The volatility Index (VIX) hit a new low on 8/25 confirming the bullish sentiment readings. This is a signal of NO fear in the markets.
# There was no bullish reaction to the Bernanke nomination and other improved economic news. Perhaps the tone is changing
His work can be found here: