Sneaky Selloffs and China’s Dangerous Road

China's likely going to devalue its currency, while the U.S. dollar ignites questions about trade and tariffs.

Action to Take: Markets are precariously positioned ahead of this morning’s inflation print. With the high probability of a December rate cut already priced into stocks, the risk/reward ratio is bearish.

Exercise caution in today's session, as the upside appears limited relative to potential downside risks. This message comes BEFORE the CPI, which I’ll dissect in a separate message because I need an hour to read the report and absorb reactions and insights.

If inflation comes in on target, any market weakness may be temporary. Still, defensive positioning makes sense with trading volumes at multi-year lows and deteriorating indicators across major indexes until we clear this morning’s critical hurdle.