Its been an astonishing ride and only time will tell if this is THE TOP but the market had bit of a change from its low vol meltup today with a 0.9% (S&P500) decline (actually bigger if you look at futures). That isn’t a substantial decline at all but it is a change of character.
I made a post 1 month ago looking at the conditions pointing to an extreme top but commented there was nothing yet that could pinpoint it like an extreme daily sentiment index reading. Well last week the Nasdaq had back to back 93% readings on Thursday and Friday. Also the Put/call ratio had just started to reverse from very extreme readings.
Last year saw a yield curve inversion and then the repo market started dislocating. Credit markets were dislocating just before the top in 2007. So this could be a theme that expands in the coming months. Central bankers will finally have to contend with the QE monster they’ve created.