«A bear flag waves.»

Traders,

The past two weeks have been brutal. Indiscriminate selling has taken the Street by storm. Unlike many previous selloffs this year, we didn’t see sector rotation. The money fleeing tech stocks didn’t find a new home in commodities or staples. Instead, investors sought the safety of cash. And that says something about just how much fear we’re seeing.

The absence of sector rotation means there wasn’t anywhere to hide. Everything is melting – even commodity stocks, which are supposed to outperform when inflation is booming. Unfortunately, the narrative is becoming mixed. While inflation is pushing basic materials stocks (FCX, AA, GDX, XME) higher, recession fears are pulling them lower. It’s a tug of war that before recently saw inflation winning out. That’s no longer the case.

In fairness, energy stocks are still holding up okay. But if you’ve been using anything outside of oil to game the inflation trend, it’s been rough. Most are waving bear flags after last week’s light bounce, and it looks as if more pain is in store.

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Video of the Day: What are and how to identify Bearish Down Trends

You trade the pattern until it changes! In this video, Coach Matt discusses downtrends and their patterns in depth by explaining candlesticks, resistance, and support.

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Chart of the Day: Alcoa ($AA)

Alcoa made the bear list of our Scouting Report this weekend. It’s a clean example of a bear flag pattern.

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