Thread by @kevinmuir

The trader-in-me is getting more bearish US stocks.

Many of you know I am usually a bull, but let me walk you through why I am getting more nervous and think we might be in for some stormy seas ahead.

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Let me start with one of my favourite indicators - the Yardeni "fundamental stock" gauge.

For those who want some background - read this: themacrotourist.com/posts/2017/02/…

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I have learned the hard way about fading this model. It continues to struggle. There are three main inputs. Unemployment (that's fine so far), consumer confidence (that disappointed today) and CRB Raw Commodity Industrials.

It's that last one that scares me.

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The lack of any real strength in the-building-blocks of the global economy lead me to believe that there are problems. I was hoping for a bounce, but it's been late in coming.

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When combined with today's disappointment in Consumer Confidence, I don't see my Yardeni Fundamental Indicator rallying anytime soon. It makes me think the surprises in equities might be to the downside.

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What else makes me bearish? The tendency for the market to roll over after triple-witching. Check out this great chart from @VolatilityWiz

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Then there is the whole repo-steria of last week. Yeah, I get it - the Fed can fix it with more liquidity. But why did the economy need the liquidity? I worry the Fed is assuming they have the whole thing under control and a little more hubris is in order.

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Next up? Geopolitical tensions. I think the market is underestimating the potential for escalations in either the middle-East or with China. Trump just gave one of the most hawkish speeches I have ever seen at the UN. This will cause market volatility.

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Finally, I will end with my favourite chart. It's Jim's @biancoresearch chart of US policy rates versus the rest of the world. Rightly or wrongly, the US is tight vs the world. This causes global monetary tightening.

9/ of 10

As I said, I am usually a bull, but I have headed to the sidelines in US equities, and am leaning short from a trading perspective. I'll admit it, I'm a little scared up here...

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