Republic Risk: Postcards from the Stevenson Battery

I'm sending you this today before the jobs report, as I anticipate good news to be bad news... bad news to be good news... no news to be great news... and whatever other tropes CNBC will throw at us.

Equity Index Strength Is YELLOW on the S&P 500 and YELLOW on the Russell 2000.

Each morning, we assess the full flows of the market by measuring statistical and technical metrics to determine broader market sentiment and the Equity Strength trend. When these readings turn red, we focus on cash, build trades around positive sectors, or take inverse positions against indices. When it is positive, we focus on short-squeeze stocks, companies with improving fundamentals, and trading/investing around the actions of corporate insiders.

The market rally over the last nine weeks has skewed most data points, suggesting that the market is still quite positive. We are still supported by a Golden Cross on the S&P 500, and we’ll likely shoot the gap back up to the 20-day moving averages of our indices. But the undercurrent of selling has accelerated - and when we see a lot of capital rush for the exits - as we have in the last four days - it tends to precede a downward shift. Right now, we’re Yellow …