Sentiment is funny. The market's new found downside momentum is incredibly strong. Folks are skeptical of oversold readings and generally think we should bounce.. Normally i'm right there with them, but fresh breakdowns are happening all over the place. Microcaps, the Russell 2K, the DAX all suggest moves 10% lower on an intermediate term basis.
I don't hear anybody saying hey keep shorting this thing, major breakdowns are happening. Kind of like we didn't hear 'hey keep buying this thing major breakouts are happening' in 2013.
Also, when bears saw head and shoulders tops in 2013, guess what happened..they all broke higher. Now, traders are desperate to see a H&S top to get out of their underwater longs. I wouldn't be shocked if the bulls are disappointed in some capacity.
Of course, that's all conjecture. Let's dig into the markets.
I don't hear anybody saying hey keep shorting this thing, major breakdowns are happening. Kind of like we didn't hear 'hey keep buying this thing major breakouts are happening' in 2013.
Also, when bears saw head and shoulders tops in 2013, guess what happened..they all broke higher. Now, traders are desperate to see a H&S top to get out of their underwater longs. I wouldn't be shocked if the bulls are disappointed in some capacity.
Of course, that's all conjecture. Let's dig into the markets.
Brent Crude and West Texas are at major support. If it can't get a relief rally here, then it's not going to. However, this is probably a decent sign the thrashing of energy may subside.
The breakdown continues in gasoline prices. It's not new news, but it's happy news. It's undoubtedly a boost for the consumer.
Materials have broken the trend off the 2009 lows. The channel break measures down to 42-43. The implications are larger.
Gold RS is getting awful interesting here. Can it break the 2014 downtrend?
The momentum picture in the FTSE has been dreadful for over a year. This is what sharp drops are made of. Now that the group is making lower lows, don't take it lightly. Note this has truncated the Measured move. Another BIG warning sign.
The DAX broke below a head and shoulders top Friday. There is some support at 8100, but the trend support in the mid 7000's is in play.
Is this a cup and handle in Corporate bonds?
TLT is testing major resistance
Home Builders have broken below a very gradual support line. They closed below the recent low. Either we get to the August 2013 low soon soon, or we get back above that 21.95 level soon.
IBB just broke down Friday. The momentum has completely peeled off over the last month. There is a much larger structure at risk here. I'll share it if/when it becomes worth noting. This can drop to the 200D if it doesn't snap higher soon.
I made a big deal about the relative strength upturn in Consumer Staples, but even that found big sellers Thursday and Friday. Those recent highs are important.
The Asset Managers index popped over 2007 highs and has already broken the 200D MA. UGLY stuff in the long term picture.
The Dow Jones Growth to Value ratio is just now breaking counter-trend support. This is a sign we are in an earlier stage of a downtrend.
The NYSE bull percent index also just now broke the up trend from the 2011 lows. Yet another sign we're in the earlier stages of a downtrend.
The NYSE composite has broken the it's long term price trends after just now breaking support from 2009.
There is plenty to find unsettling out there. Although the market seems oversold, these are the levels bigger corrections start at. We can see a lot more pain quick. Have a plan and don't forget it!
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