Today the market tried to make a new high, failed, and then sold off hard. This is a bad sign.
Four of the past six trading days saw the SPX (overall US market) index sell off with some decent volume. Trend changes usually come after a series of these sort of “distribution days” – these are relatively heavier volume days that come near interim market tops which indicate that the big institutions are systematically selling off their holdings.
There was also a very strong move into the US long bond, the dollar, and the yen (of all places). This could be the start of something; it bears watching. Who knows what sets these things off. Perhaps it was the Italian election, maybe it was just time.
Not saying this is “the top” – just that it is starting to look like a directional change in the equity market. Bond spreads widened in europe as well – a clear risk off signal.
Something new though: gold and silver both rose on a risk off day.