The carnage begins

Approximately 5 weeks ago, I warned re the homebuilder stocks, group, and sector. I said then that the reversal was 'in' but that the top could take several weeks to build. ("Such powerful momentum as this group has enjoyed will require some time to convert the true believers. Thus, each stock could levitate for weeks yet before the carnage begins.")

This is the type of warning I like: you have ample time and subsequent higher prices durinh which you could perform your own due diligence, and then take appropriate and necessary action based on your decision. Unfortunately, I realize rising share prices lulled you into making no decision, and thus are still long. Which puts the lie to the claim that trading recommendations cannot be made real time.

Not only is the top 'in' but it is an extremely ugly top; in fact, the worst kind. A momentum high that I noted earlier and now a breadth divergence higher high. Ouch. I know most investors believe this decline will be like all the others heretofore (shallow and brief), and that my stated caution re these stocks should be disbelieved. To each his own. As with the Johnny-come-latelies who waited until $300 to purchase Google/GOOG, most who purchase this 'correction' in the homebuilders look for higher prices to occur soon.

Wrong. Watch out below. The decline for these stocks will become, and be, particularly nasty. The position of the equity markets in general will deepen the sell-off in these stocks, but when conflated by the inter-market dependencies I have copiously noted...