Authored by Sven Henrich via NorthmanTrader.com,
And then it happened. Rejection. And with rejection come technical consequences. Perhaps the start of the first correction of 2020, the first correction since the Fed went wild on the intervention front in October.
The confirmation remains outstanding, but technically vastly overbought markets are at high risk of a sizable reversion trade.
One wouldn’t have known from the pre-market action on Friday as $NDX once again made a new all time high following tech earnings and $ES came within 1 handle of making another new high.
But the signs were already there. Suddenly last week more and more indices stopped playing the new highs game and started lagging as reality finally mattered on Friday and even the Fed’s ongoing liquidity machine couldn’t stop the selling.
It is with some irony one can observe that the downside began the same week FOMO articles dominated the news front last weekend, led by Barron’s $DJIA 30,000 hype cover:
http://www.zerohedge.com/markets/and-then-it-happened?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+zerohedge%2Ffeed+%28zero+hedge+-+on+a+long+enough+timeline%2C+the+survival+rate+for+everyone+drops+to+zero%29
Realist - Everybody in America is soft, and hates conflict. The cure for this, both in politics and social life, is the same -- hardihood. Give them raw truth.
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