Republic Risk: Here Come the Bears...

The S&P 500 is flirting with its 200-day moving average, and a move lower will fuel a lot of panic across markets if the mainstream media take the duct tape off the bears' mouths.

Equity Index Strength Signals

RED on the S&P 500 and RED on the Russell 2000

Each morning, we assess the total flows of the market by measuring statistical metrics on a very specific number of stocks to determine broader sentiment and the momentum trend. When these readings turn red, we focus on cash, trade positive sectors, or take inverse positions against indices.

Today, we’re still in the red, with the S&P 500 breaking under its 200-day moving average. This is a time for caution as the markets are undergoing a paradigm shift with long-term interest rates pushing above 5%. Be cautious.

Meanwhile, the free fall for the Russell 2000 remains a significant warning sign for small-cap stocks and the U.S. economy. The Russell could soon retest October 2022 lows, as it’s now trading under its pre-COVID peak.