Thursday, October 20, 2016

Collapse Is A Process, Followed By An 'Event'

Post-Brexit vote, global risk markets entered a manic blow-off phase which is now ending. The transition to bear market at all time highs, is already well underway. The signature of a bear market is stocks opening at their highs of the day and closing at their lows of the day, which has happened for seven days straight now...

The manic blowoff was centered on the Nasdaq 100 largest cap stocks (Facebook, Amazon, Google, Qualcomm, Intel etc.)...



It was a very narrow advance

New highs:




The speculative juices were flowing...

Ameritrade:



At the same time, money flowed out of the leading sector, dividend yield aka. consumer staples and utilities...









Contrary to fantasy belief, it's not good news when everything goes down at the same time, because then the market opens on its highs and closes on the lows of the day...

Money (out)flow



Today's island reversal of fortune was in oil, similar to the one last May and the one in August:

3x leveraged oil



The S&P's island reversal is pending tomorrow's Options expiration +/-



However, the big picture reversal is already underway...




Soon everyone will be on the same page.