Technically there are several problems with the tape with one issue being the failure of the NYSE advance / decline line to hold above the breakout of early December and the other being the current bearish setup of a pending Dow Theory “sell” signal.
There is a lot of components to Dow Theory but I will just focus on the averages must confirm part. Take a look at our Dow Industrials over the Dow Transports chart where I have marked the mid 2012 peaks at (A). Now note the subsequent rally to new highs by the Industrials to (B) and the failure of the Transports to confirm at the lower plot (B). That alone is not a Dow “sell” signal because while it sets up a negative divergence condition we still need the two averages to confirm the “sell” by subsequently dropping below the lows at (C) which is 12400 on the Industrials and 4850 on the Transports. If we get the “sell” adopt a low risk strategy through 2013.