Authored by Lance Roberts via RealInvestmentAdvice.com,
What a week that was...
Despite a hopeful bounce to end the month, it was a bloodbath for most assets. It was the Nasdaq’s worst July in 22 years, bonds’ biggest July yield spike since 2005, and oil’s biggest July jump in over 30 years.
Leaving investors with one big trillion-dollar question: is the momentum crash over?
As I discussed on Thursday on the Real Investment Show, the average retail investor portfolio is likely faring far worse than the broad market index. The momentum crash we just lived through was the fastest on record. It ended last Thursday with a $45 billion hedge fund handing its entire public equity book to Citadel in a single block trade.
None of it should have been a surprise. On June 22, in The Technical Backdrop: When Flows Meet a Hawkish Fed, I wrote that a market running on flows, leverage, and shrinking leadership could melt up into July. It could also reverse hard the moment those mechanical buyers turned into sellers. The close of that piece was blunt, and was published on the exact day momentum peaked. It is also named the mechanism.
“Lastly, watch the long end of the curve. If Warsh’s signal keeps the ten-year climbing, the most expensive, most crowded, most rate-sensitive corner of this market, the same one soaking up
