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I know we have a lot of strictly non-directional traders here... just wondering if anyone is exploring the idea of a medium-term downside bias in 2014. I usually don't have any conviction about market direction one way or the other, but lately I've seen some data points suggesting that we're at or near a market top. It started with a video I saw a few weeks ago on tasty trade. The segment took a look at the 5 secular (long-term) bull markets since the 30's (including the one we're in). So far, all of these markets ran for 54-59 months and ended in a sharp decline of 28-54%. The current bull market started in March'09 and is 57 months old. Click here to see the video. Another indicator that I like to keep an eye on is the Value Line Median Appreciation Potential (VLMAP). VL takes their standard universe of ~1700 stocks and estimates 4-year appreciation potential for each one. The MEDIAN figure is currently 30%, or ~7% per annum. This number has historically been a pretty good indication of market bottoms and tops. To my knowledge, 30 is the lowest figure seen in many years. I believe the lowest it's EVER been is 25. I'd say 80 is a "normal" figure, while market bottoms can see numbers in the 150-200 range (March'09 was 185). If the market goes even 5% higher this figure will be in unprecedented territory. There are successful trading services that use 50/100 as trading signal thresholds for VLMAP. Another data point that would seem to support a sharp correction was mentioned in the tasty trade video. It's "net free credit" - i.e. total margin debt less the cash available in cash and margin accounts to cover margin calls. As of November this figure was at NEGATIVE $130 billion. This means once a correction starts it will likely be exacerbated by margin covering for a while. It's not perfectly clear whether the margin is being used mostly for bullish bets, but with the index put/call ratio at 0.64 (as of Tuesday) and the direction of the market recently, it seems there's a lot of bullish betting going on. I'll attach a spreadsheet showing the calc. net_free_credit.xlsx I'm curious to get other thoughts on this. At a minimum it seems fairly evident that we should not expect the whole of 2014 to be like 2013 was... volatility could be higher, and there could be some sharp moves.