Big Top or Pee-Wee Concerns?

Do we care about the little things anymore or are they merely trifling datapoints in an empirical sea of economic expansion?  Are those calling for the Big Top mining for negative indicators or are they seeing things before the crowd?

Apple’s lack of follow-through after destroying earnings is the big iElephant in the room, but very few people notice or seem to mind.  Momentum fave Cree ($CREE) rocked for 13 percent after earnings, Goldman Sachs ($GS) and Citi ($C) report light quarters…is this thing on?

How about, for example, what Mark Arbeter had to say about the extended nature of this tape?  Arbeter is the Chief Technical Strategist at S&P so listen up.

From IBD:

“As of (Thursday), the NASDAQ 100 was almost 16% above its 200-day simple average, nearly equaling the overbought levels we saw in the middle of April,” Arbeter wrote in his weekly commentary. “The only other time in the last 10 years that the NASDAQ 100 was this overbought or extended was in the fall of 2007.”

Investor sentiment is overly bullish, which usually signals a correction is coming, Arbeter adds. Based on Fibonacci analysis, Arbeter believes the S&P 500 could decline to 1,190 or 1,130, down 8% to 12.6% from Friday’s close at 1,293.

Or how about the comments of another notable technician, Tom DeMark, as recorded in BusinessWeek this morning:

U.S. stocks are within a week of “a significant market top” that is likely to precede a drop of at least 11 percent in the Standard & Poor’s 500 Index, said Tom DeMark, creator of a set of market-timing indicators.

DeMark’s Sequential and Combo indicators, designed to identify market tops and bottoms, are giving a sell signal on the main U.S. stock benchmark for the first time since mid-2007, he said in a telephone interview. The S&P 500 began its 57 percent plunge from a record in October 2007.

I am an intermediate-to-long term bull, but I can’t help but be sensitive to these warning signs.  They are multiplying.

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