More problems for the bulls.
On top of a H&S formation (only the right is highlighted) and a failed 5 wave up, we now have a clear channel leading down.
Yesterday, I suggested failure might be at 73 but the party began a bit earlier at 67 precisely because of the channel. But it did get close to my target of 43.
And it sliced through to 50 DMA like a hot knife through butter. Why? There are no bulls and there is a tide of money leaving the market. From our friends at Lipper:
Report Period Date Link Source
Weekly 05/11/2016 Equity Fund Outflows -$6.1 Bil; Taxable Bond Fund Outflows -$514 Mil
xETFs - Equity Fund Outflows -$3.1 Bil; Taxable Bond Fund Inflows $656 Mil
Weekly 05/04/2016 Equity Fund Outflows -$11.2 Bil; Taxable Bond Fund Inflows $1.1 Bil
xETFs - Equity Fund Outflows -$962 Mil; Taxable Bond Fund Inflows $1.7 Bil
Weekly 04/27/2016 Equity Fund Inflows $101 Mil; Taxable Bond Fund Inflows $3.9 Bil
xETFs - Equity Fund Outflows -$4.5 Bil; Taxable Bond Fund Inflows $3.6 Bil
Weekly 04/20/2016 Equity Fund Outflows -$4.5 Bil; Taxable Bond Fund Inflows $3.5 Bil
xETFs - Equity Fund Outflows -$2.9 Bil; Taxable Bond Fund Inflows $1.7 Bil
To really have fun, we must get below that pesky trend line at 43ish, then get below the shoulders at around 36 to 38 and, lastly, and drill a hole in the 200DMA sitting at 2012.
And one other interesting tidbit, a friend observed the weekly 50 WMA is below the 100WMA, a rare event last seen in 2000 and 2008.
In my view, the only way for the bulls to regain control is to rise above the descending wedge which appears unlikely.
PS Lines pointing up suggest what we might see in OPEX week
On top of a H&S formation (only the right is highlighted) and a failed 5 wave up, we now have a clear channel leading down.
Yesterday, I suggested failure might be at 73 but the party began a bit earlier at 67 precisely because of the channel. But it did get close to my target of 43.
And it sliced through to 50 DMA like a hot knife through butter. Why? There are no bulls and there is a tide of money leaving the market. From our friends at Lipper:
Report Period Date Link Source
Weekly 05/11/2016 Equity Fund Outflows -$6.1 Bil; Taxable Bond Fund Outflows -$514 Mil
xETFs - Equity Fund Outflows -$3.1 Bil; Taxable Bond Fund Inflows $656 Mil
Weekly 05/04/2016 Equity Fund Outflows -$11.2 Bil; Taxable Bond Fund Inflows $1.1 Bil
xETFs - Equity Fund Outflows -$962 Mil; Taxable Bond Fund Inflows $1.7 Bil
Weekly 04/27/2016 Equity Fund Inflows $101 Mil; Taxable Bond Fund Inflows $3.9 Bil
xETFs - Equity Fund Outflows -$4.5 Bil; Taxable Bond Fund Inflows $3.6 Bil
Weekly 04/20/2016 Equity Fund Outflows -$4.5 Bil; Taxable Bond Fund Inflows $3.5 Bil
xETFs - Equity Fund Outflows -$2.9 Bil; Taxable Bond Fund Inflows $1.7 Bil
To really have fun, we must get below that pesky trend line at 43ish, then get below the shoulders at around 36 to 38 and, lastly, and drill a hole in the 200DMA sitting at 2012.
And one other interesting tidbit, a friend observed the weekly 50 WMA is below the 100WMA, a rare event last seen in 2000 and 2008.
In my view, the only way for the bulls to regain control is to rise above the descending wedge which appears unlikely.
PS Lines pointing up suggest what we might see in OPEX week