10 Comments
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Neural Foundry's avatar

Excellent breakdown of the current market divergence. The crossroads framing is spot on becuase it captures how the VIX Mix fear signal hasnt translated to actual weakness in breadth metrics yet. I've seen similar setups in early 2023 where defensive positioning got expensive right before rotation accelerated. The McClellan improvements alongside small cap strength suggest institutional money is quietly hedging rather than exiting, which could flip quick if data cooperates.

Jim Carroll's avatar

Thanks. It's like when my non-investor wife says: "How can the market keep going up with all the crazy shit going on in the world?" I'll know it's time to take cover when credit markets decide to roll over.

Stefan Schmidt's avatar

I expected that weakness to occur. Here is a screenshot of my custom indicator showing it’s value from Jan. 13, it pointed to a drop which then actually occurred the next day (yesterday). I also wrote that yesterday could be the low and so far we are currently in the green today, potentially confirming that low.

https://substack.com/@stockanalysispro/note/c-199733647

Jim Carroll's avatar

Did you build that indicator in StockCharts? Looks like their color scheme.

Stefan Schmidt's avatar

Yes and here is a screenshot of how the indicator closed yesterday EOD.

As one can see it strongly mean reverted in the lower range:

https://substack.com/profile/369074133-stefan-schmidt/note/c-200204383

Jim Carroll's avatar

Curious as a StockCharts user who made one attempt at using custom data. Do you need to update manually or is there an API you can use?

Stefan Schmidt's avatar

I’m updating my indicator manually.

My research right now says that they sadly don’t offer an API.

Jim Carroll's avatar

That was my experience but I'm not the most tech savvy.

Peter's avatar

I do have some amount of international exposure in my "don't touch this ever no matter what" portfolio. It's been good to me.

Jim Carroll's avatar

Most people have missed the outperformance of international equities over the last year. US investors still suffering home country bias.