The recent new highs on the $NDX accompanying the recent rally off of the August and September lows have been accompanied by bullish headlines. $SPX 2300+, $DJIA 20K, etc. And it is true the action in some stocks is truly awe inspiring.

Yet all the action has an oddly familiar ring to it and it may not be bullish. While most traders today haven’t really lived through the 2000 bubble older hats like me have institutional memory. Back then it was the “horsemen” of stocks that seemed to defy gravity and just kept pushing higher to stratospheric valuations. Yet back then the leadership was ever more narrowing and oddly enough we are now finding ourselves at a very similar spot.

And not only is the leadership narrowing, but it is happening at exactly the same price level.

In the $NDX chart below the horizontal red line is representing the exact same price as 15 years ago, right at the market’s peak of the year 2000. Note the negative divergence on the bullish percentage of stocks in the $COMPQ (click chart to zoom in). New highs with fewer stocks participating:

It is of course the $COMPQ that did not confirm news highs during this recent rally:

Not even close. Does this all point to an imminent crash similar to 2000? I can’t know, nobody can, but we can observe that the recent rally excels in non participation as opposed to participation.

On an equal weight basis both $RSP and $XVG indicate significant weakness:

Insiders are not buying:

And high yield? $JNK and $HYG are not playing along either:

Now here’s where it gets interesting. The leaders that have been driving this rally are vastly disconnected from their moving averages and very overbought. Just a basic reconnect to their weekly 5EMA and 8MAs risks a 5-10% correction in these stocks.

Weekly chart examples:

Extended much? You decide. But all these factors together have a very familiar ring to them.

But before you think this issue is one of tech only, it is not. It’s one of haves versus have nots. And this large negative divergence extends to large cap stocks across the board as seen here in the $OEX:

The big difference now compared to 2000? All the central banks are “all in”, although the ECB may add to its QE program in December. Last time central banks came to the rescue of a sharply correcting market by cutting rates. Who would be coming now?