Iceberg, Right Ahead

The type of price action we are seeing in 2016 is consistent with the initial leg down in a new bear market.

Nearly one month ago, we noted the confirmed major top in the homebuilders, a major part of the market which is also one of focal points of the U.S. economy and a chic bullish rotation thesis for many headed into last year. And, in fact, many other critical parts of the market have followed suit.

As it turns out, the transports are not old hat either. But, instead, when they topped out around Thanksgiving 2014, it was the beginning of the end of the bull. 

Essentially, we are seeing a reverse lockout rally, the blueprint for a new bull run, flipped upside down. I will flesh out what that means for Members in my usual Midday Video, coming up. 

For now, the S&P 500 Index, below on the daily chart, has momentarily breached the 2015 lows. 

Headed into a long holiday weekend, it is likely this will be on the minds of many a market player who now see the iceberg, right ahead.