Republic Risk: Expect Volatility in April

All sectors are firing Green, but the inflation trade is starting to return. Weakness in technology would be negative, but the S&P 500 is what we're watching like a hawk.

Equity Storm Watch Is GREEN on the S&P 500 and GREEN on the Russell 2000

We enter Tuesday with solid market momentum - with some sideways action on the broader Russell 2000. Our indicator tends to go negative (Russell) when inflation fears kick in and investors in companies with little profitability and high debt panic. 

We’re back in “inflation mode” due to an uptick in ISM Manufacturing numbers. 

The S&P 500 and the Nasdaq have proven to be different pairs of animals. They have largely only experienced sharp downturns during periods of liquidity weakness, much higher interest rates, and concerns about the stability of the financial system.

Right now, all systems are still positive, but we’re seeing some capital rotation to start the quarter. 

We’ve never had a sharp downturn without the SPY, and the technology sectors are positive. That’s a testament to the power of Global Liquidity and fund flows in and out of the bellwether technology sector.

Both are positive at the moment. Meanwhile,…