Markets sold off late finishing at session lows with a late afternoon selloff. The Nasdaq was hammered by 1.5% and the S&P 500 lost .9%. Growing concerns about the genuine health of the overall market are coming from groups like the homebuilders. Their recent reversals were just breathtaking, not in a good way. The XHB for instance traded very taut until this past Tuesday. The ETF is lower by more than 5% this week. Weekly volume is already larger than any one since the week ending 6/28/13 with still one more session to go Friday and a bearish engulfing pattern looming, depending on Fridays close. It has been higher 11 of the last 13 weeks and did take out a double bottom with handle pattern 0f 33.95 on 12/29/14. When breakouts unravel this rapidly it often is a red flag. Heavyweights LEN and KBH reported today. LEN was down by more than 7%, just a few days after reversing wildly from above a nice looking cup base and may have been some foreshadowing. KBH a notable laggard in the sector, off more than 40% from recent 52 week highs, behaved as if it was clubbed with a 2X4 lower by better than 8% Thursday. Stocks in the online education group have been decimated. APOL reported on 1/8 and dumped 13% and notice it has not recorded an up day this year yet. BPI is lower by 50% from recent 52 week highs. Are these names trying to “teach” the permabulls something, pun intended?
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