Fundamental backdrop: While the US economy recovers from its worst shock since the Great Depression, the US Federal Reserve Board has maintained an extremely accommodative monetary policy. From an interest rate perspective, that policy has been in effect now for almost six years and it would seem the trend has slowly started to exhaust itself. The official end of Quantitative Easing (QE) and now talk of the Fed actually raising short term interest rates has not only brought the concept of 'free' or easy money into question but has also started to show its effect on the Yield Curve (stockcharts.com/freecharts/yieldcurve.php). While the curve isn't inverted yet (signaling impending recession) it has flattened appreciably suggesting investors should keep an eye open for 'three steps and a stumble scenario' going forward. Should the curve invert (which looks to be at least a few quarters down the road) I for one shall become rather bearish of equity investments in general. From an earnings perspective, as a result of the aforementioned six years of 'free' money, corporate earnings have rebounded to pre-financial-crisis levels. That is all well and good but begs the question, what will future earnings revisions look like? If we know commodity related names will no doubt have hugely negative earnings revisions (because of the recent collapse in Energy prices for example) and we know financial related names are not going to be guaranteed profits by the Fed anymore (flattening yield curve), does that not mean a big chunk of the equity market is poised for disappointments down the road? The collapse in energy costs should act as massive injection of capital into the economy (from both a consumer and industry perspective). Will that translate into spending? Only time will tell, but given the trajectory of Fed policy at the moment, my hunch is this is their expectation. Technical backdrop ((Monthly price chart analyzed below): If we look at price itself we see a number of reasons to get concerned. Not bearish, but concerned nonetheless. Firstly, we just tested the 'golden ratio' (1.618 fib) extension target off of the last significant trading range ('07 peak to '08 trough). While not a reason to short in itself, this level often represents a profit taking area for professional traders. Indeed, within my trader education program we spend quite a bit of time talking about Fib extensions where 1.618 to 2.00 is our typical target window for trending markets. Secondly, internal indicators (specifically momentum here) are both overbought (Willy is and has been officially 'stupid' for a while now) and potentially divergent (MACD histogram is suggesting a potential bearish momentum divergence is building). While that reading remains 'potential' I don't see a 'top' in the market just yet. The fact that Willy is 'stupid' and the existence of a divergence at all suggests it is far too late to consider 'investing' in this market. Lastly, volume (and money flows) while not bearish at the moment has moved a long way in just one direction and that is a little concerning to me. Both OBV and raw volume appear to be ok at present and given the current seasonally (we are in a friendly time of year for stocks - buy when it snows, sell when it goes...) i don't see sellers getting aggressive here for a while. Interestingly, we are now just back to the 'pre-crisis' level for the OBV. This is where, on balance, institutions stopped the last rally, shall it be resistance here too or support for a vault higher to take us up to the 200% Fib 'ultimate target'? Frankly I don't know (no one does really) but as long as this indicator hasn't 'topped' I won't get aggressively bearish just yet. (continued....2/3 tradingview.com/v/AzCIQlGB/)