Just back from a Thanksgiving vacation, and I couldn't help but be amazed at watching the market inch to historic highs — twice — in a week!
But I haven't changed my opinion: The market is advancing on thin ice. There are several reasons I'm suspicious.
The market is already showing signs of slowing down. To begin with, the rally last week was on declining volume. Volume was strong in the first two weeks, but the buying interest began petering out last week. We rallied largely because sellers did not want to part with stocks, not that buyers were still enthusiastic.
Some sectors are already looking toppy. Pharmaceutical stocks, which rallied in the initial days after the election on hopes of reduced regulation, have been on a clear downward descent in the past two weeks.
Bank stocks, which have seen the most notable rallies, have moved mostly sideways in the past week.
Same with bond yields ... the big rise occurred in the two weeks after the election and beginning last week 10-year yields have begun flattening out at around 2.3 percent.