Picabia, known as Papa Dada, purposely layered disparate images in his collages to provoke confusion and strange associations.

I feature the piece above now on display at MOMA, mainly because of how closely the red and green ribbons resemble current equity price movements.

“Our Heads Are Round so Our Thoughts Can Change Direction” perfectly describes recent market price fluctuations.

Like Picabia himself, the market paints a new world paradigm punctuated by confusion and strange associations. Thoughts that changed direction surely explain the post-election market.

On November 9th, those round heads willed the rally in Financials and Transportation while they summoned the depths in Biotechnology and Commodities.

One month later and with the euphoria possibly waning, will the thoughts of the round heads change direction again?

Perhaps I merely concoct a poetic way to say that the market is overdue for a correction. Nevertheless, whether a correction or a shift in the collective consciousness, today’s action does indeed provoke a level of confusion.

All the roundhead talk of 20,000 in the Dow evokes thoughts of the gremlins the market saw for the longest time on the wing of the plane at 18k. Only now, with this higher altitude, the gremlins might prove even more unpredictable.

Those gremlins at 20,000 could take the shape of the Russell 2000. After making new highs Friday, today, Granddad IWM formed a topping-type pattern.

That topping pattern appears again in KRE, Regional Banks, IYT, Transportation, SMH, Semiconductors and in XRT, Retail.

Why is this significant?

The round heads of 5 out of the 6 Modern Family members might have changed direction. IBB, Biotechnology and our 6th family member, entered a Bearish Phase today.

Undoubtedly, bad press about big pharma price gouging hasn’t helped. But as an integral part of the Modern Family, it does give us a window seat to view the gremlins that dance on the wing of the most heavily speculated sector.