Financials Are Setting Up To Lead The Markets Down
With that said, the potential exists for a retracement of the entirety of the 2017 gains for financials. And it comes at really what is the perfect time: Everyone believes that macro tailwinds are incontrovertible for the space. The only thing incontrovertible is that markets punish consensus opinion backed by overwhelming asset allocation, creating doubt where there was once conviction. These cycles occur regardless of the fundamental backdrop and very often end up influencing the fundamental backdrop greatly. That's a subject for another article, however. The chart below paints the picture. Financials are starting to wobble at the worst point possible, against two trajectory points of tremendous relevance that only increase the probability of this being a substantial turning point for the markets as a whole. (click chart to...
Here Is Why The Markets Should Generally Suck For The Rest Of 2018
Expansions of volatility after blowoff moves are generally a death knell in and of themselves. Expansions of volatility after blowoff moves, accompanied by historically high levels of optimism only serve to further sink in the dagger. But when you get an expansion of volatility, accompanied by historically high levels of optimism, while vacillating around a technical point of relevance going back to some of the most important highs and lows of the past two decades......then you have a real issue. (click chart to enlarge) With that said, this remains one of the worst spots to be long equities of this entire bull run starting in 2009. Downside is at a minimum to 2,200 on the S&P at some point in 2018, for a roughly 23% decline from the top tick in...