SPX's price trend is clearly flattening, but it is still rising, just at a slower rate. Consider today's price action. SPX opens at $2038, trades down to $2034 and then up to $2043, and then closes at $2041, up nearly $2 on the day. This certainly isn't the large gains of a couple of weeks ago, but it just steadily rises. RUT's price trend is marked in its contrast with SPX. RUT has traded downward for the past three days, closing today at $1164, down $10. Should we ignore RUT's divergence? I don't think that would be wise.

Volatility opened higher this morning with 14.7% on VIX, but ended the day at 14.0%, about three quarters of a point higher than Friday's close. So volatility isn't very high, but it hasn't settled into very low levels after the October correction.

The markets have been trading at low volumes for the past several sessions, with 1.9 billion shares of the S&P 500 stocks trading today. Eleven trading sessions have passed since the trading volume of the S&P 500 exceeded the 50 dma. Trading on the NYSE declined 2% today and trading on NASDAQ decreased 4% from Friday's levels.

The New York Fed's Empire manufacturing index for November reported a result of 10.2 on their survey, up significantly from October's 6.2. Industrial production declined from September's +0.8% gain to a negative 0.1% loss for October. Capacity utilization declined a bit from 79.2% to 78.9% in October.

My rational analysis of the markets and the economy cause me to be more pessimistic about the prospects of continued market highs. RUT's declines of late appear to support that thesis. But every time I think I have built a solidly reasoned case for the market's direction, the market seems determined to prove me wrong. We'll see.

BTW, the answer to Friday's "big event" in last week's blogs: it was Prince Charles' birthday. He and I are the same age. That is the source of the nickname, Duke. The first blog reader with the correct answer has opted for a free copy of my forthcoming book, Time Is Money, which should be on Amazon before year-end.