Stock market is still showing a bullish posture, staging recovery rally after recent mild sell-off brought by failing at resistance SPX 1340 and RUT 850. RUT 856, the old bull-market high from 2007, was briefly penetrated before retracement. That would suggest plentiful energy for the index that should propel it to the new bull-market and all-time highs soon. SPX has also briefly penetrated resistance at 1320 on this recovery run before falling back just under that threshold.
All that said, I am starting my watch for the seasonal top, and putting together some charts helpful in spotting such event, concentrating on RUT as it is expected to lead the SPX in the topping process/sequence. The following chart (also posted in my charts list) captures both 2007 and the upcoming tentative tops looking at the similarities and differences between the two.
Another useful chart is the bottom-spotter combing daily SPX and put-call ratio in the background as a histogram. This chart requires interpretation of the PC ratio dependent on a specific market situation, but in general there is no sight of a bottom in a selloff unless PC ratio goes above 1 (1.2-1.3 for bigger selloffs) and the genuity of the bounce is confirmed by PC ratio at least 0.9 (the higher the better).
Another new chart is the oil priced in gold chart, showing that that ratio is half what it was in the Summer of 2008 and the trend is up now, closing on a resistance. ( Oil is twice cheaper in gold that it was then). This chart truly deserves watching because of implications of this observation. If the oil breaks out against gold, and the gold keeps going higher as the current trend would suggest, by the next summer we all will be longing for the 100 bucks oil. Just very superficially: if gold approaches 2000 and the ratio goes back to the 2008 top, the oil should be around $300.
That leads us back to the energy. I added another chart for natural gas with better snapshot of the current price action. Note the apparent triangle (not an orthodox though). It appears to be coiled enough for an upside breakout that I think is imminent.