Risk: It's Late 2015... All Over Again

China's deflationary spiral is a serious problem, and the second wave of it has started. Last time this happened, the S&P 500 collapsed. Then, China printed enough money to fuel a global 2016 rally

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

We're getting started this morning with markets under pressure after the best day of September so far. Yesterday's gains helped the market find some footing. Still, anticipation now turns to tomorrow's Consumer Price Index, which has traders on their toes discussing the possibility of a 50-basis point cut next week when the Fed meets to discuss monetary policy.

This morning, markets face the sobering reality that specific names and sectors remain overweight, dealers and leveraged funds are net short, and institutional investors need to pare back positions.

Adding to the pressure on markets, Apple (AAPL) shares are down 1% in premarket trading after launching another underwhelming iPhone. When Apple stumbles, it sends ripples across the market as it is included in most exchange-traded funds.

This is the problem with heavy concentration at the top of these ETFs, known as the Magnificent 7 (Mag-7), which includes Apple, Ama…