Republic Risk: Reliving 2018?

There's something odd that seems to rhyme with the last refinancing challenges that we faced. But our signals are turning positive, so ride ahead and let's see if we can get a rally going.

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

Each morning, we assess the full 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.

The Russell 2000 ETF (IWM) is holding above 170 to start the day, and the S&P 500 will likely turn Green today after the jobs report showed a lower estimate than expected. We’re back in the Bad news is good news part of the cycle - and investors should remain cautious as valuations remain stretched. With so many hedge funds net short, this could set off a squeeze rally similar to other events we’ve seen since negative cycles closed over the last year. Please pay close attention to the 170 level on the IWM, as that is the line in the sand for our readings.