There is a divergence between two leading indicators and the stock market. One of these charts is lying…
Whereas stocks and copper usually move in tandem and are correlated to one another, this correlation has recently broken down. Copper is selling off but stocks (as we saw in the Dow and S&Ps) remain strong and bullish.
Furthermore, one other leading indicator which has been the financial stocks, has also shown a divergence. The financial stocks ETF (XLF), as well as key financial stocks such as Goldman Sachs (GS) and JP Morgan (JPM), have shown weakness and broken price structure at support.
Clearly not all is right with the markets… This could be an early warning of cracks in the stock market rally and a sign that a correction is imminent.