Today the equity marking had some of the nastiest action of 2013. While there has been many signs of bulls horns slowly cracking, today was a real trend changer, and it was fast.
$SPY crashed from an attempt to break all time highs to finding support at the 20 day line in one day. That is what a near term top looks like my friends. High probability here that volatility expands and the next support levels is $174 then the 50 day line.Very low probability that $SPY scratches its way back to all time highs anytime soon. This is the first close below the 10 day sma in 20 days, this is a change of trend for now.
$QQQ feeling the brunt of momentum stocks rolling over. $QQQ cut through its 20 day like a hot knife through butter and its RSI is almost a 180 degree angle down now. The first close below the 20 day in 20 trading days.
$IWM that has lead this market up is already close to its 50 day line, under that line is a dangerous place to be and could lead to an actual market correction of around 10% possibly.
Will today be known as the 2013 twitter top? Time will tell, but the addition of all this overhead supply is not good news for the perma-bulls that think the market can’t go down with Bernanke greasing the wheels of the stock market. The reality is that anything can happen an we need to keep an open mind and trade price.