Did The Market Top Out on Friday?

RobotTrader's picture

With "billions under management" at risk and thousands of nervous hedge funds playing with 3x leverage (thanks to Bank of America Prime Brokerage), everyone wants to know if now is the time to "make a killing" by going short stocks.  After reviewing many charts, it sure looks like another "Get Out of Dodge" day.

Let's review the checklist:

1) QQQQ and IWM breakdown?  Yep, they cracked big.

2) Financials breaking down?  Not quite yet.

3) Retail stocks breaking down?  Not quite yet.

4) Commodity "Midnight Massacre"?  No.

5) Fleeing to USDX as carry trades unwind?  Not yet.

6) Emerging market status?  Blowtorched.

7) VIX going vertical?  Yep.

8) Summation Index and McClellan Oscillator going down? Yep.

http://stockcharts.com/charts/indices/McSumNYSE.html

 

The
"all important 21-day" keenly eyeballed by the mo-mo crowd is about to
break.  One more day, or a gap down on Monday will seal the deal.

Check out the VIX:

Instead
of showing the bad break of the EEM, instead, you can see the mo-mo
gamers immediately started piling into the EDZ "Triple Whammy" casino
table with 5x normal volume:

With
everyone attempting to "make their year", the hedge funds are acting
like "speculative locusts".  We'll have to watch and see how fast
everyone swarms over to the bear casino tables.

Put/call ratio today went ballistic:

Note the huge volume in USO today.  1974 all over again?

So where do the hedge funds hide during bouts of geopolitical turmoil?

Netflix, of course....

Unfortunately,
the card playing, booze drinking, and escort playing Plutocrats in
Davos will have to have an emergency meeting this weekend to avoid a
complete and total meltdown in the global financial system.

Because
the girls are all sitting home with their clickers, scared to death,
toggling between CNN news and watching the latest horror flick on NFLX.

Rest assured that come Monday, if the market gets smoked, the 19-year old video game console traders at TIAA-CREF, CalPERS, Fidelity, etc. will be forced to flip and go short as the FemBots will be screaming and shouting:

"If it's going down, short it!!!"