This Market Wants To Crash
Today the S&P Momentum Index (ETF) reached 2020 pandemic overbought at 20% above the 200 day moving average:
"The Index tracks the performance of stocks in the S&P 500® Index that have a high "momentum score". The Fund and Index are reconstituted and rebalanced twice a year on the third Fridays of March and September. Constituents are weighted by their market capitalization and their momentum score."
It's clear that Wall Street bots have weaponized earnings season to generate momentum.
The last two times Caterpillar went parabolic during earnings season, the market rolled over.
Option skew: Out of money put bets on a crash is the highest since the 2021 high:
Friday's NYSE breadth collapse attending a +1% gain in the S&P 500 was the biggest divergence since 1987:
"According to David Rosenberg, the founder of Rosenberg Research and a former Merrill Lynch economist, such extreme divergence with the S&P 500 up 1% or more has occurred on only one other trading day in the past 53 years. That day? Oct. 20, 1987: the day after "Black Monday," when the Dow fell nearly 23% in a single session, still the biggest recorded decline in its history."
My divergence calculation shows the % gain on an NYSE down day at an all time high, which would not have included the October 1987 data point since that was not an all time high.
Friday's data point is the largest in history.
What's not to like?
