When the Crap Reverts

When downside leaders like the small caps finally revert upward to their previous (down) trends, maybe then the market will top out and the sentiment rally will terminate. If moves like this do not change their trends it is just hope (and the peoples’ funny munny as printed by the Federal Reserve) keeping the dream alive. It’s just a reversion to trend as the market slowly lets go of all that angst from March and the media prints its rationalizations daily.

I saw some optimism somewhere about how the small caps are taking over leadership and that’s bullish. No sir, it’s not. It is a reversion to the previous trend and said trend is down. Much like the NDX/SPX ratio shown previously, the reaction is happening within a trend. In that case, up. In this case… not up.

iwm spy ratio

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