One of my favorite indicators is weekly buying and selling climaxes. Simply put, a selling climax occurs when a stock makes a new 52-week low, then reverses and closes higher on the week. You tend to see a cluster of these near market lows, and they are considered to be spurred by the "smart money" accumulating bullish positions.

The flipside is a buying climax, which is a new 52-week high followed by a sell-off, and lower prices on the week. In other words, this action could be the result of smart money distributing shares.

Do they work you ask? Well, back in late May, I noted a large amount of selling climaxes as a sign a bottom could be near. Then two weeks later another surge of selling climaxes confirmed the early June lows were significant, and a big rally was underway. That's exactly what happened, as June was a great month for the bulls.

The data this week is rather concerning, as we just had the most buying climaxes since the early May peak. Now, this isn't a reason to simply go out and short the market here, as it usually takes a few weekly surges to confirm a change in trend. But this is something the bulls need to pay close attention to, and I'll update you over the coming weeks if I see this trend continuing or expanding.