A. I am worried about more deterioration in technical indicators like the advance-decline line.
"HISTORICALLY, six to nine months before a setback, the advance-decline line has usually deteriorated," Ms. Yamada said.
One technical plus for the market was that the advance-decline line reached a new high in mid-July, but the line has fallen since then.
Other signs of a thriving market are heavy trading as prices rise, she said, and strength in the advance-decline line, a compilation of the number of issues that rise each day minus the number that fall, divided by the total number of issues traded.
According to Chuck Zender of the Leuthold Group, a research firm, the "advance-decline" line, which measures the difference between the number of shares with rising prices and the number with falling prices, is dropping like a stone, and now looks more ominous even than before the 1987 crash.And this is despite bumper profits.
A declining line may not mean less is being spent on an item; it could indicate that spending in that category is growing at a slower rate than overall spending is rising.
Not long after joining Kennedy's White House, he drew the president a little graph of his authority: power on the vertical axis, his putative two terms on the horizontal, with effectiveness a declining line between them.
Technicians, noting the strength in the advance-decline line lately, have forecast at least six more months of higher prices.
The NYSE advance-decline line is down to a level not seen since 1995, when the Dow Jones was below 4000.
Unweighted measures of market breadth confirmed the indexes, with the advance-decline line based only on NYSE operating companies reaching new highs.
My read on the advance-decline line is that within a bullish climate it tends to peak 12 months before the market.
