When Tech rolled over early last month and pounded the 50 day, the rest of the S&P was at peak relative strength. Subsequently, Tech has gained strength while the broader S&P has weakened.
I think we all see where I'm going with this - We've never seen this kind of chasmic divergence before between Tech and the rest of the market:
As we see above, the last time Tech imploded was two years ago. At that time, Consumer Staples was already gaining relative strength versus Tech. When the August decline hit, leadership immediately rolled over to Staples as indicated below by the higher lows. Which is why when Tech retested in early 2016, the casino found its footing.
That's not going to happen this time. Tech's new all time high corresponds with Staples languishing below the 200 day:
That's what tightening monetary policy does - it implodes the casino.
At the end of the cycle.
August, 2017:
"The Fed has tried to reduce its balance sheet six times in the past, with five ending in recession"
"I'll take those odds and a Powerball ticket to go"
