The Great Reversal – Chart of the Day (7/11/24)
Today we witnessed one of the wildest trading days in the history of markets, with all of the major secular trends of the past decade reversing course in dramatic fashion.
At the top of that list: the 180 degree shift in market cap leadership.
Small caps ($IWM ETF), which had been lagging large caps ($SPY ETF) by a massive amount this year, rocketed higher with a gain of 3.6%. At the same time, large caps fell 0.9%.
The 4.5% spread was a 6 standard deviation event and the 2nd biggest outperformance on record, trailing only the 10 sigma differential on October 10, 2008.
How unlikely is a 6 sigma event? If markets followed a normal distribution, such an event would be expected to occur only once every billion years. But clearly they don’t, and it won’t take another billion years for it to happen again.
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The post The Great Reversal – Chart of the Day (7/11/24) appeared first on Charlie Bilello’s Blog.
