Bear Market 2.0

This is the afternoon market report for February 15th, 2024.

The order of the day was filling the CPI gap from Tuesday's gap 'n crap. For the past two days, the algos have been churning this market higher back into the CPI gap ahead of tomorrow's PPI reading.

What is interesting about today is that mega cap Tech has lagged all day while small caps including regional banks outperformed.

Here we see a close-up view of regional banks which have been on a roller coaster ride in February and it's only the middle of the month. At the start of the month, NYCB imploded collapsing regional banks. Then there was a rally off the lows followed by this week's CPI report taking banks back down to the lows. And now another rally back up to the retracement highs. This back and forth action included the two biggest NYSE breadth collapses since last October.

Zooming out on small caps we see that they peaked way back in late December. Then they imploded in early January. Since that time they've been rallying back in a three wave correction. In the lower pane is the Nasdaq breadth oscillator which also has a zigzag pattern. Which means that the broader market is now overbought again.

Zooming out some more on small caps and what do you get?

Bear market 2.0.

aka. "Not this again!!!"