A short-term downtrend probably started Wednesday or Thursday.

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The bullish percents are pointing lower.

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The SPX equal-weight is up against resistance, so some struggling and choppy behavior is likely and expected.

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The same index is also at a point on the weekly chart where some struggles are likely. In addition, the weekly stochastic works fairly well at providing a general time frame where the market starts to struggle on a medium-term basis.

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The new 52-week lows on the Nasdaq are elevated. There is definitely some selling pressure in the general market.

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Last week I thought the small caps would start to rally, but so far there is no sign of strength in this group. A general market rally is always more convincing when there is leadership from small caps.

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The Longer-Term Outlook

The ECRI Index is now giving the bulls the green light to buy the dips and the breakouts.

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Sector Strength

More disappointment for gold bugs.

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Large-caps are clearly the leaders, and small-caps are getting weaker. Also, bonds are retaining some of their strength despite the market rally. It seems like late-stage bull market behavior to me. 

Sector strength is curious with Technology leading along with the dividend-paying defensive groups. Investors are clearly favoring safety and income, but are also still looking for growth.

I'm sticking with the leaders in my portfolio, although I do own health care and have yet to reduce those positions. 

I haven't sold health care because it is my favorite group and somehow got sucked into being stubborn.

Here is what I told myself... I don't like to sell positions based on headlines which often turn out to just be dips that I should be buying. Also, I am thinking that before this bull market is over, health care will be a leader again because it is defensive.

However, the truth is that my trading performance is always much better when I just follow market leadership. Or stated differently, I always do better when I follow my own rules and advice.

When I step back and look at this spreadsheet, I see the influence of the inverted yield curve (or nearly inverted).

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Here is a look at the health care ETF. The relative strength line gave a decent sell signal early in the year. Apparently, I wasn't paying attention.

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This group hasn't been on my radar. It has given a nice little signal of strength probably due to low rates. I am going to pass, though. It isn't for me. I am not sure why but maybe because it feels so late in the game to be buying home builders.

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Outlook Summary

Bottom line: The economy has picked up and the market has responded favorably. The indicators that I follow are doing their job nicely. However, I am a pessimist and the sector alignment in the spreadsheet alarms me.

• The long-term outlook is positive as of Apr-12. 
• The medium-term trend is up as of Jan-4. Watching for some weakness in this trend.
• The short-term trend is down as of Apr-18.
• The medium-term trend for bond prices is up as of Nov-16 (prices higher yields lower).