aka. Skydiving without a parachute
IBD.com [July 11, 2014]
"Overall, the week's action was the worst in three months, as measured by distribution"
"Distribution days 6 for S&P and four for Nasdaq"
The real action was in the small cap Russell 2000 which is newly laden with IPO junk and doesn't have Microshaft and the other mega-caps to hide the damage, unlike the Nasdaq.
IPOs got monkey hammered this week:
And, the monkeys got hammered again this week
ETraders were sucked in for one more pump and dump
ETraders were sucked in for one more pump and dump
CBOE Put/call (inverted) i.e. the call/put ratio with small caps:
Divergence #1:
Russell/Dow ratio not confirming the new S&P all time high
Looks a lot like 2011, except the S&P had stalled back then prior to (mini) collapse
Looks a lot like 2011, except the S&P had stalled back then prior to (mini) collapse
Divergence #2
Do we have a (high) right shoulder?
Do we have a (high) right shoulder?
Russell with S&P 500:
We never saw this divergence between small caps and the rest of the market in 2007:
We never saw this divergence between small caps and the rest of the market in 2007:
Divergence #3:
Correlation between the Nasdaq 100 and its underlying stocks went from nearly one a year ago, to now deeply negative (lower pane). And the average stock is now down 28% from its 52 week high (red line):
Correlation between the Nasdaq 100 and its underlying stocks went from nearly one a year ago, to now deeply negative (lower pane). And the average stock is now down 28% from its 52 week high (red line):
Divergence #4:
New 52 week highs (50 DMA)
Most stocks peaked a long time ago
The Hotel Californication
The S&P is a mere 1% off of its all time high
It's now 8.5% above its 50 week moving average
As we see above, most stocks are already primed for a third wave lower...
"Nothing is solved and everybody knows it"
Some people know more than others - the Billunaires have left the building
TRIN 200 DMA
aka. "distribution"
Large investors betting on a collapse
Option skew (50 DMA)
As we see, on this time scale (50 DMA), skew is a leading indicator, peaking before the market...
The ETraders are fat and happy
Risk: Complacency ratio
Unfortunately, risk is binary, as we've learned so many times before
It's now 8.5% above its 50 week moving average
As we see above, most stocks are already primed for a third wave lower...
"Nothing is solved and everybody knows it"
Some people know more than others - the Billunaires have left the building
TRIN 200 DMA
aka. "distribution"
Large investors betting on a collapse
Option skew (50 DMA)
As we see, on this time scale (50 DMA), skew is a leading indicator, peaking before the market...
The ETraders are fat and happy
Risk: Complacency ratio
Unfortunately, risk is binary, as we've learned so many times before
BTFATH
