End of Day Caution? (Republic Risk)

Just a quick update. There was a lot of selling pressure today, though it might not look like it from the final performance on Thursday.

Dear Fellow Expat:

There are undercurrents of risk happening now despite the VIX back under 14 and the MOVE Index (bond volatility) dropping sharply after the election.

China is still facing a debt problem… France and Germany are economic basket cases… and a rising dollar could put lots of stress on emerging and developed nations that must pay dollar-denominated debt while trying to pay in their local currencies.

Today was unusual, with notable drops in retail names like Land’s End (down 12%) and sizable declines in housing and casino stocks. I’ll note that our readings have aligned with big breakouts and declines in these sectors whenever we have a negative signal.

Poor man’s analysis: The S&P 500 has 11 stocks that have increased 7% in a week and nine that have decreased 9% in a week. Selling pressure on the end of the bell curve is picking up. But the selling pressure isn’t on the bigger names - but toward the bottom end of the index’s names. This tells me that there’s likely just …