So That's Why Our Signal Went Red Last Week...

Our signal went negative on December 10. It took a little while, but today's Fed meeting has explained all the market bleeding.

Dear Fellow Expat:

Last Tuesday night - from the old hospital bed - I sent you a note.

I said that our signal on the S&P 500 had gone negative.

That followed on Friday with a negative move on the Russell 2000. That little hand there is the SPY signal I calculated after I came out of that hospital nap.

This preceded the longest Dow Jones selloff since the 1970s. Today, we’ll have 10 negative days. At the time, I didn’t know why our signal went negative…

I just knew that it had.

Historically, we’ve seen these events happen without any clue why.

The February 23, 2020 signal - the first we’d ever tested - was obvious in hindsight. We knew that COVID-19 was going to ravage the U.S. economy. But we didn’t realize that there was a huge problem looming with shutdowns just weeks later.

On June 8, 2022 - the signal went negative.

Nine days later, we discovered it was the worst hedge fund selloff in 15 years.