Risk: Build Cash, Don't Panic, Prepare to Buy

Let's keep our heads on a swivel... we're seeing volatility push higher once again.

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

It's becoming painfully clear that something is fundamentally wrong with this market. Yesterday, we saw the steepest drop since the Bank of Japan's rate hikes in early August, which blew up the trillion-dollar carry trade and significantly rattled markets. 

During the session, Nvidia was hit particularly hard, suffering a 9.5% drop—a staggering loss that erased over $300 billion in market cap. This morning, you might read that a government subpoena received by Nvidia was the underlying cause of the selloff, but that’s nothing more than an excuse. When the market wanted to go higher, Nvidia shrugged off antitrust headlines as if they were nothing. 

Yesterday’s price action resulted from overweight funds selling more than they were buying. That’s capital exiting the market without a concrete destination. For now, we'll just have to pay close attention to where it ends up; currently, it's moving to cash, bonds, and back to…