Why I think the stock markets are weak...

Here are four reason that makes me think the stock market in the US is set for a correction. Most of them have to do with the US Dollar weakness that has been the case for the last several months. Commodities have been on a tear until recently. But for the last few weeks I have noticed what I think is distribution, ie. the big holders of commodities stocks are selling.
The first case is the US Dollar. Long steady decline. But over the last few days signs of an imminent rally???? Look at how the last two days have finished near the highs of the day. And the volume has stayed exceptionally high for the last 4 days as the price went sideways. I know, it is "bottom picking", BUT....

The second case is the continued strength in TLT, which is a fund that tracks the price of the 20 yr. US Treasury Bond. A steady uptrend for the last few weeks. This is at a time when the talk in the markets is of the Federal Reserve discontinuing the purchase of US Govt. debt, which should cause the long bond to go down in price/ up in yield. Usually a rising treasury market signals a lack of inflation. But everybody is screaming "inflation!!". So why is the long bond going up? Is that where the money, that I believe is cashing out of the stock market, is going?? Maybe... The only caution is the volume. Not impressive.

And then there is the silver market. It has been on a tear lately that can only in the short term be called a "bubble". A hard correction the last two days. Hard enough that it will probably turn into at least a several week correction.... Precious metals in decline means deflation. Deflation means declining prices for assets. Like stocks.

And along the same vein: RIO. Rio Tinto, a copper and gold producer. I see signs of distribution since about January 20.  High volume with sideways action through April 18 or so. And then the big down volume again today.....

And then today. Clorox down hard. Up since early March on low volume, and then the earning disappointment today. Clorox with an earnings disappointment. Clorox.

And here is the story:
http://online.wsj.com/article/BT-CO-20110503-714622.html
Here is the chart of the S&P. Up for the last two years. Lower and lower volume on the advances......

Our markets have been going up on the back of a weak dollar. The rest of the world is tightening interest rates to prevent inflation. We will have to tighten to support the US Dollar at some point. The US cannot have interest rates that are LESS than the inflation rate. I think the markets are starting to price in higher interest rates and a more restrictive monetary policy. Not to mention a tighter fiscal policy that is coming from the Federal Govt., and the states are already cutting back.....All hard on the unemployment rate....
To sell the indexes now would be a case of "top picking". Not something that a trend follower should advocate. But.... the signs are there.