"THIS IS ONE OF THE MANY SCREAMING RED FLAGS I MENTIONED ABOVE IN WONDERING HOW ANYONE COULD BE LONG AND IGNORE THESE SIGNALS."
Adding that I couldn't sleep at night being long this market knowing what we know, seeing what we have seen...AND THE CHICKENS COME HOME TO ROOST as we get another look at what the market will look like as the central banks start to tighten policy.
Overnight the PBoC (People's Bank of China) tightened and effectively put $80 billion in carry funding on the line or rather is taking it off line sending the USD/JPY below $120, but more dramatically for the equity participants, sent the Shanghai Composite down -5.4% overnight, the largest 1-day drop there since August of 2009. It's unclear to me how much of this may have been reflected in the futures from Sunday night, Sunday Night Index Futures, or even just or daily leading indicators and 3C, BUT THE MARKET HAS BEEN SCREAMING RED FLAGS FOR SOME TIME, THIS SHOULDN'T BE A SURPRISE TO ANYONE AND THUS THE REASON I MAINTAIN MY SHORTS.
Suddenly the elevated SKEW makes sense for many waking up this morning...
I suspect the SPX will break this broadening top which we are a ways away from doing, but we are breaking below it...
I don't see any immediate bounce for the markets, far from it as the Index futures have no positive divergences, but are in line all the way down...
It will take me about 15 mins just to get to my charts with all of the alerts going off one after another, but to those who used this October rally to short in to, I say congratulations, that is what it was meant for and today is just the start, if we bounce 3% tomorrow, this market is still broken beyond repair.
I'll have updates out ASAP.
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