Republic Risk: The Russell's Next Test

The Russell 2000 will try to hold the 1,950 level today. Another leg down would be 1,900. From there... I don't want to know

Equity Index Strength Is GREEN 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 S&P 500 is sitting directly at its 20-day moving average, a key reason we’re still in “positive territory.” All stocks above their 20-day moving average are technically considered in breakout mode. But we have three indicators that are getting closer to a bigger trend lower. There’s a big way down to the 50-day.

But the Russell 2000 is now under significant pressure. And we may now be on the brink of a severe slide depending on the jobs report tomorrow. I anti…