Hey Market Pilot,
The poor breadth of the market is finally catching up to the indexes. I have written about this a few times over the last 10 months since the small caps broke in mid-February, 2021. Since then, there has been a deterioration of stocks all over the place while money came out of speculative names, moved into leaders, and finally into value names as the last resort.
Now that the leaders are getting hit, what should we expect?
What is occurring in the market is called a “Hindenburg Omen.” The Hindenburg Omen is when new 52 week lows start increasing rapidly while at the same time new 52 week new highs continue and the indexes are in an uptrend.
This signifies that breadth is falling apart and the new leaders are defensive names, i.e. the last resort for hiding while the market turns down.
This market action is unique and important to understand so I will be discussing this, and more, in my free Urgent Market Update webinar this afternoon. It has been a long time since we have seen this kind of action so let’s get up to speed on what to expect and how to handle the volatility.
There can be immense opportunity on the short side since traders and liquidity vanish in these kinds of markets. If you play it right, it can be fun and rewarding. If not, it can be mentally draining and detrimental to your account. Decision fatigue is a real thing and a topic I will address today as well.
So tune in and get up to speed on the latest turn in the market.
Your Profit Pilot, TG