RR: Real Estate Woes Accelerate

In addition to a credit downgrade from Moody's, we awaken to another negative update in the commercial real estate sector. Also, I haven't slept in two days.

Equity Index Strength Is RED on the S&P 500 and RED 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, build trades around positive sectors, or take inverse positions against indices.

There’s a lot more chop coming - and now the markets are taking a hit after Moody’s announced a cut to the U.S. credit outlook. Although the credit agency reaffirmed the nation’s AAA rating (we have a money printer), the focus was on the long-term deficit spending that we’re doing in good times. What will it look like next year if we see anything resembling a recession?

How significant would the U.S. deficit be in the next 18 months?