“Canaries” About to Fall Off Their Perch? (by SB)

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My three Fed Stimulus Program "Canaries" are
beginning to lose steam after today's (Wednesday's) gap up and fade on
negatively diverging RSI, as shown on the Daily ratio charts
below.

Such is also the case on the European and Chinese
Financials ETFs
(compared with the SPX), as shown on the following
Daily ratio charts.

Perhaps the noxious gases from
the "Fiscal Cliff" discussions are beginning to have an effect,
as traders take profits, before the U.S., potentially, goes over the cliff at
the end of this month. Both political parties seem as far apart as ever, with no
resolution in sight.


Meanwhile, the
SPX:VIX ratio closed below major support (broken blue
horizontal line) today, as volatility increased. Momentum has hooked down and is
below zero again, so I'd look for increasing volatility, with the heightened
probability of further downside on the SPX.

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