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This Is Not Investment Advice
The Market Right Now - Distribution Day
Tuesday’s session extended the turmoil from the Geo-Poly weekend into a significant dumping session in the first day of action this week. Let’s dive in and see how bad the damage is.
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First, some very poignant and wise words from The Big Picture at Investor’s Business Daily which happen to emphasize the precise issue we have been discussing as it pertains to the major averages and dragging around the behemoths and titans:
HYG Daily
RSP Daily
IWM Daily
MOVE Daily
Thoughts and observations:
The major averages and guides (Spooz, QQQ, Daq, Dow) all took legit hits and broke support levels . . . . . adding to their sluggishness from last week . . . . no doubt about it . . . . and not to be dismissed I completely agree with Investor’s Business Daily . . . .
Most important point from IBD above in my view . . . . “relative strength may not be enough” . . . . context very important . . . . what they are saying is that regardless of how solid something looks Right Here and Right Now (say PL as an example for now) . . . . in the short and intermediate term it’s very unlikely they can’t counter the downdraft created by the titans . . . . Translation: if stocks like META, AMZN, TSLA, MSFT, NVDA, and other big ones fall another 5-10% . . . . it’s awful tough for Leading Stocks and the Watch List to hold up forever . . . . .
Note: 21 EMA Daily shown on all . . . . as shown Spooz equal weighted, small caps, and junk debt are all still holding/testing local support . . . . healthy for now . . . .
Bond VOL had a very notable one day surge up . . . . very, very important to see if this is sustained . . . . note JGBs were already smashed so is it a breakdown or reaction to “sell America” during Davos . . . . time will tell . . . . .
Headline VOL can swing in both directions . . . . .
Prudence and caution at all times . . . . let’s see what happens . . . .
Will be closely monitoring to see if any bleeding spills into Higher Time Frame Money Flow for small caps, equal weighted, and junk debt . . . . .
