If the Nasdaq is peaking, it should look like this: Looking at the 8 other times the Nasdaq Composite formed a major peak, there was not a lot of back-and-forth price action. The index tended to rally hard into the peak, then fall hard right after.

A sector split not seen since 1932: So far in 2020, the difference in year-to-date returns through August in technology stocks is more than 75% higher than for energy stocks. That's the widest split since 1932. Only 1987 and 2000 saw a sector split nearing 50% through August of those years. Historically, the ratios between best and worst sectors tended to narrow after such wide differences in returns.

The latest Commitments of Traders report was released, covering positions through Tuesday: The 3-Year Min/Max Screen shows a clear theme among "smart money" hedgers - selling commodities. They moved to multi-year short exposure in sugar, soybeans, and coffee. That pushed their shorts in agriculture contracts to the most since 2016. Looking at equal-weighted positioning in the contracts that make up the CRB commodity index, they have never been shorter than now. The Backtest Engine shows that when their total short was more than 100,000 contracts, as it is now, the CRB index suffered declines in the months ahead each time. As always, if commodities can buck this trend, it strongly suggests a long-term positive change in the market environment.

Bottom Line:

• Weight of the evidence has been suggesting flat/lower stock prices short- to medium-term, so we'll have to see how Thursday's carnage sorts out; still suggesting higher prices long-term
• Indicators were showing high optimism, with Dumb Money Confidence above 80% and evidence of skyrocketing speculation while the market environment is turning more neutral - typically a bad combination, though so far the risky conditions have failed to lead to any weakness
• Active Studies show a heavy positive skew over the medium- to long-term; breadth thrusts, recoveries, and trend changes have an almost unblemished record at preceding higher prices over a 6-12 month time frame
• Signs of extremely skewed preference for tech stocks neared exhaustion by late June, especially relative to industrials and financials (here and here)
• Indicators and studies for other markets are showing less consistent forward results, though it's not a great sign for Treasuries that hedgers are net short and optimism on metals recently became extreme with concerning 100-day analogs, with "perfect" breadth among miners recently dipping a bit.