Tom Demark, founder of Market Studies LLC is calling for a 10%+ decline in the S&P 500 that should begin within the next two weeks. DeMark’s Sequential and Combo indicators are used by many of the largest hedge funds in the world and are currently generating their first sell signal since 2007. Demark told Bloomberg that the decline could be “pretty sharp” and “I’m pretty confident that in one to two weeks, the market will be in a descent.” Demark’s sell call coincides with very high levels of bullishness, sharp declines in short selling, high complacency levels as evidenced by the VIX (see below) and a general belief that equities will not be allowed to decline due to the ever present “Bernanke Put”.
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