Market tops are a process. They just don’t happen overnight like the headlines would often have you believe.
You’re seeing stuff like this today: “Dow futures tumble 300 points on worries over rising COVID-19 cases”
And people actually believe it. Heck, even the headline writer probably believes it.
But if you’ve been following along here, where we track the actual facts, stocks peaked back in February, and that was confirmed in March.
The Nasdaq new highs list peaked on February 8th. And the Nasdaq Advance-Decline line peaked the very next day on February 9th.
That same week US Small-caps and Micro-caps decided to stop going up as well:
This market HAS BEEN a hot mess. It’s not anything new.
It’s also perfectly normal. In fact, if the market wasn’t acting like this, then that would be abnormal. This is classic classic Year 2 type behavior.
We discussed all of this and more throughout the panel discussion last week.
But you can see it across the board.
Look at the IPO Index putting in a top that same week in February:
You saw the exact same thing in the IBD50 Index, which seeks to identify the top 50 Growth stocks in the US Stock Market.
It peaked in February. Lower lows and lower highs ever since:
You’ve seen it across the Intermarket landscape.
Look when Aussie/Yen also stopped going up. And High Beta (which was the leader off the 2020 lows) has also been the big loser since Q1:
It’s actually been the Bond Market that’s been rallying.
Not stocks. Other than a few stocks still going up, most have been falling in price for a while.
Meanwhile U.S. Treasury Bonds are working on their 4th straight month of gains.
But the bond market has been telling a completely different story.
Bonds rallying and rates falling apart is the exact opposite of inflation:
Regional Bank weakness and Strength in REITs had already been telling you that.
So who do you prefer to believe? Journalists or the bond market?
And it continues to be.
We’ll be discussing all of this and what we’re doing about it for the rest of the summer on tonight’s call:
Coming to You LIVE: Monday Night Charts
Looking forward to our live monthly conference call for ASC Premium Members Tonight, July 19, at 6 p.m. EDT! Click here to register.
As always, if you can’t make the call live, a recording and the slides will be available here by Tomorrow morning for all Members.