A notable change in market behavior has been evidenced for two weeks, in a clearer way than the ongoing rotational action that preceded for months.

Last week we saw a couple days during which the Senior Indexes were up a lot; or at least firmed substantially, while FANG and other presumed leaders more of a momentum nature (and typically involved directly or indirectly in a technology field, or one that requires advanced technology to deliver their products) were failing to participate, and even declining quite visibly.

That happened again on Monday, really from the get-go, with the DJIA and S&P up, while Nasdaq, QQQ, NDX and SOX were down and didn't even rebound much when the intraday recovery efforts were mounted. Some say this means little; I think it's a clear change in market behavior that matters.

In addition, all of this conformed to my Saturday forecast to be 'wary' of a market that gapped-up on Monday (actually I projected that is exactly what it would do); followed by a sell-off, rebound, and a faltering.

What we got was even more significant because it was far more than merely a 'buy-the-rumor / sell-the-news' response to passage of the Senate version of the Tax Bill (now in reconciliation with the House version; and we suspect a compromise version will be adopted; though it would be unusual if House members didn't have their two cents again; and try to change-it-up a bit).

In any event; what happened Monday was very much aligned with forecasts but also telegraphs more potential dangers that lie ahead. That's surely not an assurance of significant imminent decline; but forewarns about the actual activity (and perhaps thinking of money managers who are not quite merely behaving passively, as many of the new-generation of investors 'believes'.

We're not interested in the dialogue about passive versus active investing in this case. We've already forewarned that 'passive investing' is a marketing approach that made it easier for managers to pitch consistent investing and easier on those who simply would buy baskets of stocks. Part of a problem I anticipate can be seen already; where stocks in a 'basket' go up or town in lockstep; which reduces the ability to separate the really good companies at given price levels from the mediocre ones.

By the same measure, that's going to make the good ones more attractive, once the market finds a real low down-the-road. But for the moment what is most notable about the past week or a bit longer, is 'active' decision-making. The concurrent declines almost across-the-board in tech is reminiscent of a time back in early 2000, when many of the 'tech bubble' momentum stocks, fewer at a time due to preceding the FANG concentration of this era; started failing to participate with the Averages; and it was indeed a warning sign.

Bottom line: What's going on in the market now (over these past weeks) is an anomaly to common behavior; even though it is a pattern I've assessed as a warning sign of exhaustion, and even peak 'ridiculousity' as I called it.

That relates to institutions raising S&P goals (just because they do that until it reverses the trend, to find some reason to justify their absurd projections); when there's no logic given the market's discounting mechanism. This is the action which may 'flip' previous behavior, with market actions disconnected from broad economic activity or household income; with a new 'flip', where it is conceivable the 'actual' economy strengthen more (even economic boom times); while monetary policy and asset markets concurrently reel for a bit.

Also cheerleading the upside (some pundits tend to do that, or analysts that come up with absurd S&P targets that sound like Bitcoin numbers) finds the near-ignoring of one of the few time historically that you do see new all-time highs in the Averages concurrent with measurable percentage declines in a slew of momentum and FANG stocks (combined are the modern version of the 'nifty fifty' of an earlier era). If history is a guide, this is a warning.

In sum, far be it for me to suggest that a market could actively melt down in December; especially given a presumption that securities held, move into a new tax year in just three weeks. However, market action adheres to more than our daily forecast, but shows a flight to safety ongoing (led by techs and even the overall Nasdaq). They will try a hail-Mary turnaround.