Negative divergence with the Baltic Dry Index as an indicator supports bearish equities view

Thanks to Trader Brian who pointed out the negative divergence between the drooping Baltic Dry Index ($BDI) against equities, that can be charted as I've prepared and posted below (using the S&P 500 ($SPX). This was one of the reasons Tony Caldaro gave recently for considering the rally most likely complete. I added a 20-period exponential moving average (ema) to the $BDI in the bottom indicator window which helps accentuate its weakness as it's fallen under this ema.

Since the use of the Baltic Dry Index in his weekend update made me think of the transports, I've also added my basic daily-bars chart of the Dow Transports. Talk about weak-looking indicators! Assuming we get a bounce in equities tomorrow, I can understand many may take the chance to sell, and I'll probably be doing it too ...! I've thought some more about Bernie Schaeffer's comment that there may not be enought optimism, i.e. that stocks may be able to climb a "wall of worry". I also know that in Elliott Wave theory, "c"-wave (and third-wave) movements are accompanied by awareness that the news is bad. Given that Elliott Wave analysts are charting that the markets' next move is a "c" (or alternatively 3rd wave, or even a 5th wave that will include its own internal third wave (and besides, fifth waves are capitulation moves) - we actually can expect any drastic drop ahead to be accompanied by bad news and very bearish attitudes soon enough. Just remember that on Tuesday on any intraday rally.