While the Dow Jones Industrial Average and S&P 500 Index continue to chug along and post new highs, there are more than a few warnings signs that are starting to pop up along the way. Not the least of which has been the drop in market volume and poor market breadth. In a new report on overall market conditions, the strategists at Piper Jaffray point out numerous troubling scenarios that could upset the record-breaking apple cart. While overall they remain bullish on the year-end prospects for a strong fourth quarter rally, and they have an aggressive 2,100 year-end target, their near-term indicators are all flashing yellow, and they can see a sell-off to the 1,600 to 1,650 level on the S&P 500, or a staggering 15% to 17%.

24/7 Wall St. recently pointed out eleven ways to protect portfolios in the event of a market crash while still staying in the market.

In the Piper Jaffray report, the analysts hit on several very solid points that do make good sense. The bottom line for investors is it may be time to take some profits and raise some cash. Here are some of the top Piper Jaffray reasons we could be for, in the words of Bananarama’s hit song in the 1980s, a “Cruel, Cruel Summer.”

1) While some of the market leaders like Apple Inc. (NASDAQ: AAPL) and Google Inc. (NASDAQ: GOOG) charge ahead, many of the other stocks are standing still or going sideways. In fact, a declining number of high-quality stocks are the ones driving the market higher. The kind of poor market breadth could be a telltale danger sign.

2) When the benchmark 10-year Treasury bond broke through the 2.5% yield mark last week, that was another troubling indicator. The Piper Jaffray team point out that typically bonds lead equities. A divergent 10-year bond yield versus the broader market is concerning. The fact that interest rates are falling is not bullish for the economy or the global equity markets.

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3) While $1 billion flowed into equity funds last week, that was only 10% of what flowed out the week prior. That clearly shows the market may need to take a breather.

4) The Piper Jaffray report also points out that faster money may be trying to catch the proverbial falling knife with some aggressive momentum stocks, and there could be trouble ahead as the reflex relief rallies in top momentum names like Splunk Inc. (NASDAQ: SPLK), FireEye Inc. (NASDAQ: FEYE), Tableau Software Inc. (NASDAQ: DATA) and other top names fizzles out.

5) While not specifically mentioned in the Piper Jaffray report, other Wall Street firms that we cover have pointed out that typically in a mid-term election year, the second and third quarters are often very dicey and could spell trouble. However, like Piper Jaffray’s fourth-quarter positive stance, most mid-term years also end up very solid as the election outcomes are determined.

6) While the Dow Jones Industrial Average prints new highs, the Russell 2000 has consolidated, trading sideways to down. This divergence is a worrisome sign to the analysts at Piper Jaffray. Historically, divergences between the two indexes are very bearish and have been associated with higher volatility and years where there is a meaningful pullback.

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No one can be sure if the Piper Jaffray warning signs foretell a sizable correction. One thing is for sure when markets have traded to all-time highs, or in the case of the Nasdaq to 14-year highs, the old Wall Street adage may make perfect sense right now. Nobody ever went broke taking a profit.

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