Not everyone is asleep:
"The leaders of Corporate America are cashing in their chips as doubts grow about the sustainability of the longest bull market in American history."
insiders are selling more than they have at any other point during the bull market, which began in March 2009."
Last year's extreme volatility was due to the predominant reflation trade, rising interest rates, trade war, and quantitative tightening. This year's volatility is due to the predominant deflation trade/global slowdown, market bifurcation, trade war, and Trump's mega deficit liquidity reduction.
We've never seen a market this fragmented, as the "TINA" deflation trade has left the majority of sectors behind: Financials, Transports, Retail, Small Caps, Housing, Autos, Industrials, Materials, Energy, Emerging Markets, Rest of World.
Which leaves Utilities, REITS, Consumer Staples and of course Tech stocks at or near all time highs.
So far in August there have now been three high velocity tests of the 200 day moving average on 90% down days. The latest one on Friday. There have been more 90% down days this month than there were during the October and December declines combined. An indication that there are no more true safe havens. One more plunge below the (red) line and it's game over.
With Labor Day long weekend approaching, the set-up could not be more precarious:
New highs today from Utilities, exhibiting relative strength as they did last December:
Momentum Tech much stronger now than in the fourth quarter.
Shopify is the new "safe haven"
Gold stocks going parabolic
This latest attempt to bounce off the 200 day has been feeble, as evidenced by the Russell 2000 which just broke support going back to last December:
Overall, wave 2 retracement has been weak.
Wave three down will begin near the wave 1 low with the market overbought:
The Snow White market is by far the riskiest market we've ever seen...
