I’m watching something I haven’t seen in weeks. Sector after sector is making two and three standard deviation moves with zero explanation.
The S&P looks calm. It’s not. What’s really happening is manic rotations underneath the surface.
One sector explodes higher. Another collapses. Money is on the move and it can’t find a home.
We’re moving at 180 miles an hour and we can’t see five feet in front of us.
In tonight’s video, I break down exactly what’s happening:
- XLF exploded Monday, hit nearly two standard deviations outside the expected move by Tuesday, and is now collapsing back down on Wednesday.
- XLU is in a full two standard deviation decline with no fundamental catalyst.
- General Mills is seeing three standard deviation movement over the last couple sessions.
- Kroger is getting annihilated for no discernible reason.
- XRT hit an all time high today, trading outside every expected move metric.
The broader market is holding together for one reason: tech isn’t participating in these rotations yet.
Nvidia is flat. Meta is flat. Google is flat. They’re no longer carrying the market higher, but they’re not selling off either.
That’s the question for the days ahead. Does this manic activity spread into tech?
The advance decline line just printed one of its most negative readings in weeks. Volatility is finally picking its head up off the mat.
I don’t think this marketplace holds together until earnings kick off next week. Watch the financials tomorrow. More sell side activity there and it bleeds through everything else.
