May 6, 2011 – More Proof That the Stock Market is Topping



2) More Proof That the Stock Market is Topping. If you are looking for more proof that the markets are topping, take a look at the two sector charts of industry leaders below.

The SPDR (XLE) energy ETF has been one of the bull market's leaders, but has a clear double top developing. Close a few more cents lower, and a major break down will be at hand, potentially taking the rest of the market with it.

The oil service holders ETF (OIH) looks even more precarious. It is showing a distinct head and shoulders orientation demonstrating that the top is already in. that is where the severity of this week's down move is coming from.

If just these two charts were ominous, I normally wouldn't care. However, you can look across an entire range of assets classes in oil, gold, silver, commodities, foreign currencies, and other industrial sectors and find similarly grim formations. That, I am more than happy to bet against.



Is This Another Top?