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Today a lot of damage was done on the markets to say the least. So I was not surprised to see ZH indicate that the Hindenburg Omen technical signal was triggered. The HO means that the market has become highly bifurcated - with a lot of stocks making new lows and a handful still making new highs. Based on the name, you can tell that the outcome from an HO event is generally not considered positive. It's fully consistent with my thesis that most stocks/global markets are already in a Third Elliot Wave down, and therefore the U.S. markets are only held up by a handful of defensive dividend paying stocks. Generally technicians wait for a "cluster" of HO days to occur, but given today's carnage, I won't be waiting for additional "confirmation"...
Suffice to say, you could come up with no more ironic outcome for this market than to go up relentlessly for months, only to a hit a new all time high and reverse hard down into the abyss, even as congratulatory platitudes can still be heard...
Given that I have discussed the various defensive stocks that have been holding up the markets at this late stage (consumer non-cyclicals, Utilities etc.). I will focus on those sectors/markets that are diverging the most:
A lot was said today about gold, but silver was bludgeoned even worse. Meanwhile, the entire commodities sector - copper, oil, lumber etc. got shellacked. Therefore, it should come as no surprise that the Canadian stock market got monkey hammered today. It's back at a level it first reached in 2009 (and 2008, 2006...):
Jeff Cooper told us to watch the small caps - they would bounce off the 50 DMA and carve out a right shoulder - preceeding a 1987 style waterfall decline. So far, so bad...
No surprise, given the hammering to commodities, energy stocks went into dislocation mode, down 4%:
