Following-up on the theme of volatility peaking at turning points in the market, the auto parts and secondary market for car plays, such as AZO ORLY and KMX, below, have all seen brilliant multi-year runs.
But Carmax is a good example of those loose and sloppy chart patterns we are seeing the market at-large, even with resilience by bulls. Typically, this does not end well after long bull runs. The action in Carmax, again after a multiyear bull run, indicates violent indecision and sellers slowly gaining control, more than anything else.
In addition, the bifurcation in this sector is acute, with F GM both weak and getting weaker.
A healthy, sustained leg higher for the AZO ORLY KMX group is not likely imminent.