Red

We're red again on the Russell 2000.

Dear Fellow Expat:

Well, the warning signs were in place.

Market breadth is weakening, and the ongoing downturn in global liquidity appears to be hitting the markets. This was a ferocious candle that just hit within the last 20 minutes. The Russell is the central vein of the markets because it represents the U.S. economy, the ongoing challenges for zombie stocks, and more.

This could be a broader reaction to the Fed next week - as some voices are suggesting that they won’t make their next cut.

I expect a negative crossover for the S&P 500 on its daily technicals soon.

Recall that the markets don’t go straight down. They move in a stair-step pattern, so trying to short while we’re at the extremes of the day is a dangerous game.

Instead, continue to hedge based on our recent negative moves in recent days.

I hope to have more information soon to understand what’s causing this one.

Pay close attention to the 20-day moving average for the S&P 500.

And we’ll keep our eyes on the central bank…