So far this morning, we have the Dow hitting a new, all-time high. The Russell 2000 Small Cap Index closely follows and is within hitting distance of a new, all-time high. The S&P 500 is running in third place, with at least 60 points to go. The NASDAQ 100 is miles behind, at least 1000 points off its all-time high.

Interest rates have backed off a little overnight, while oil is hitting 18-year resistance here. This is giving technology a small boost, as well as a few other growth stocks. Financial and energy stocks are taking a breather. One day, of course, is not a trend.

All of this equates to a striking index divergence – and not a typical healthy, syncopated, or correlated equity market. We have to give some allowance for the discrepancies because the cyclical/value sectors and the leading growth stocks are coming off a historic spread favoring growth. Allowing for some spread reversal is not unreasonable. Nevertheless, the behavior is a warning that this correction may continue south after this brief reprieve.

On cycles, keep in mind that the 20-week cycle could bottom (and likely already has), but the next 20-week loop may result in some indexes and sectors achieving new highs and some not. The cycle could roll over below all-time highs in some sectors – perhaps even in the Nasdaq 100 index itself. This sometimes happens in the fourth 20-week sequence that leads to the 18-month low. The chart below outlines the current road map.