E Market Briefing For Wednesday, September 9

Extremes are behind - while selling intensifies as sobriety grips most investors after the fact of the 'above trend' probe that completed at least the big-cap surge last week as you know. We pointed-out how the 'super-caps' led the move for a couple months, and how that gave an 'illusion' of strength that wasn't accompanied by the broad list.

The Apple decline, which paused, expanded as they accounted the litigation against Epic Games, and that contributed to the later-session increased selling too. Various events related to iPhone, iPad and so on are fine, but that's not what this is about as institutions feel compelled to cut back, and some of that came from excess chasing.  (AAPL)

Others now see the term I used to describe the S&P thrust over 3400 to 3500, simply an 'overshoot', above the rising tops pattern. Sort of typical for an upside capitulation, it was a cap-weighted revelation of trend chasing, which is what you see as we said, at the 'end' of a trend, not the start.  

Since calling the low back in late March, this was the first time we got a real blow-off (other than a couple setbacks like one in June we emphasized as a bit similar, but this one is coming from an overshoot that wasn't the case then). Also back then the participation was far better in the broad list (still coming off the 'automatic rally' from the March low), and the broad list was lagging as we got the S&P 'overshoot'.  

That matters a lot, because while calling for this overall setback, against a myriad of factors and known-unknowns, we did not call for catastrophe because of the narrow 'construct' of the preceding 'overshoot' dominated by the 'super-caps'. We did expect September to be rough (still do), with intervening rallies, one of which could occur 'if' you get a reasonable stimulus deal from Congress. 

Eye-opening vaccine trial halt(s). Detailed based on 'what we know so far' later. As I hear so far, the chemistry and design of the AstraZeneca / Oxford vaccine derives similarly to the Russian Sputnik vaccine. Legitimate concerns or not, misinformation or just vaccine trepidation is going to prevent quickly attaining herd immunity. (AZN

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William K. 1 month ago Member's comment

Thanks for the interesting and educational article. Being reminded of who holds so much of the US debt is not happy. The big problem with debt is that it must eventually be paid.