Welcome to the Real Vision Daily Briefing. It's October 11, 2021. A Maggie Lake in here with me today is Mark Ritchie, the second manager of RTM capital. Let's get a snapshot of where we stand as we start this week. The action today was once again, you can guess it in commodities crude oil, rallying nearly 2% crypto also on the move Bitcoin broke above 57,000 at last check. US equities me.

While moving in the other direction, the Dow down half a percent, the S&P 500 down a third, the Nasdaq flat and the bond market was closed for the long holiday weekend.

Mark, it's great to have you back with us. I think the last time you were on was sometime in the summer, late summer, and it feels like a lot has happened since then.

So why don't we start giving an overview of how you're feeling right now about the investment landscape. What's on your radar?

Sure, Maggie, good to be with you guys. Always fun to be back on real vision. So at the end of summer, really starting around the 4th of July, I was kind of looking at a couple of different things, specifically the overall breadth, and I was anticipating the stock market led by mega cap tech to sort of break out and potentially lead us higher.

And I gave a few caveats to sort of what to look for under the hood and things didn't pan out that way, and that's sort of exactly the way things played out.

So if you look at a chart either the Nasdaq or the NYC composite, you'll see that the advanced decline line peaked in early summer, and then while the index sort of made marginal new highs in around August, it was not confirmed.

And that's usually a negative divergence by my work. That's the sign of sort of a tired bull. The bull herd is losing members, even as it's continuing onward in its trajectory, and the breadth under the surface, and I mentioned prior that this was when the market was still well above its 50 day moving average, but I was saying more than half of the stocks were trading below.

Well, now it's gotten even a little more ominous in terms of, you take the longer term moving average to say the 200 day moving average in the Nasdaq currently, which is still trading above its own respective 200 day moving average, 60% of the stocks in the Nasdaq, almost two thirds are below their long term moving average.

So again, we're just kind of seeing some of that deterioration, but the market has also now come off its high. We're off, you know, to the lows last week, something like 8% in the Nasdaq, and the question here is, you know, sort of where do we go from here? We can get into that, but, you know, yeah, yeah, and I know you look at fundamentals and technical. So you sort of saw that coming from a technical point of view, we will dive in a little bit, but do you feel that that was triggered by fundamentals? What do you think is driving that?

Well, I think there's a number of things in terms of so even seasonally and lots of people have been posting on like September tends to be, you know, one of the worst performing, you know, monster returns are kind of chunky and soft, especially as we come out of that, you know, earning season. There's not a lot of headlines. Then if you look at the headlines, we did have, there's quite a bit of, you know, of pessimism skepticism over the Evergrande issue grappling with fed policy and tapering possible future inflation.

And you know, when the market is wrestling with all that, people just tend to lighten up on on risk exposure and you've sort of seen that tech has traded at least in the last three or four weeks, quite poorly. And if you look at again, look at the Nasdaq chart, you know, over say the Nasdaq 100 of the queues over the last several weeks, you're seeing a lot of distribution, which means multiple days with a market closes lower on higher than average volume, and if you compare that with the last four or five months.

That's, you know, that's a change in character. And whenever I see that kind of stuff, this is and make this analogy a lot. I'm not saying all the devils are here for a bigger move lower, but there's a few and you just need to be careful. I'm holding a decent amount of cash until I see a little bit more clarity.

And then we can get into, you know, say looking at the Russell as well and how I'm thinking about that.

Yeah, I feel like I feel like everyone's kind of been waiting for the shoot to drop. There's a sense that there is some sort of watch out coming.

You think that that that rotation out of the mega cap tech stocks. And yes, you can look at headlines, whether they're related to Facebook and the blowback there with the whistleblower or, you know, Amazon. I mean, you could take your pick.

Do you feel like some of that selling in mega tech was related to the fundamentals of the technology or people just looking to liquidate those huge gains they had in technology.

And either go to cash and keep their powder dry or chase the energy story.

I think you kind of nailed that. I think it's a combination of all of those. And whenever people have long term profits.

And oh, by the way, we have potential increases in long term capital gains taxes here in the US as well possibly coming.

And then you add some of that other, you know, fear uncertainty and doubt to it. Plus another, you know, sector starting to perk up and look better.

That's what you're seeing. You're seeing rotation. And we really we really had that all year where one group is rotating into another and I've talked about this.

...