Blueprint for a Top

As we grind higher and higher, here are a few things that I am looking for that will show that the top is near:

1.  A chase for performance, gravitating towards the higher beta outperformers like AAPL.  Tech stocks go up disproportionately.  Check. 
2.  Lagging transportation stocks, and lagging lower beta stocks.  Check.
3.  A break to a new marginal high that gets the crowd bullish and believing in 1500, etc.  Sentiment indicators indicating lots of bullishness.  Not there yet. 
4.  A shot of good news that get those on the sidelines into the market, an ECB bond buying program announcement, a China stimulus package, or QE3.  Still waiting. 
5.  Increase in volatility while the market goes nowhere.  Not there yet. 


So we have 2 out of 5 on the checklist, once we get 4 out of 5, I will be looking more actively to sell short.