Consolidation, Covering, Or Capitulation?

Tyler Durden's picture

While AAPL keeps levitating (no matter how high complacency in its options stands), it seems the rest of the equity markets are less enamored (for now) with this strange new normal of the Fed/ECB's own making. Below we present four charts indicating regime shifts in average trade size, index dispersion, high-beta sector convergence, and high-beta financials convergence. Whether these are bullish consolidations, short-coverings, or total capitulations - who knows? But with the S&P 500 reverting lower to catch-down to VIX's less sanguine view and the total lack of a move on the BoJ news today - we suspect (at least for now) that all the good news is out.

 

Average Trade Size spiked into and around the FOMC announcement (helped by the futures roll also) - this tends to portend trend changes...

 

High-beta sectors tri-verged immediately after the announcement but have rapidly converged back to a more systemic level in the last few days...

 

High-beta financials (BofA and MS) surged on the news but have falledn back rapidly since...

 

and Dow Transports have dropped notably as th NASDAQ remains supported by the incredible edible AAPL...