Yesterday was the first day of trading in 2016. It wasn't pretty. In case you missed it, there was a broad selloff in global equity markets.
First up on our red data radar screen, China's Shanghai Composite Casino. It dropped as much as 7% on the day. In response, the Communist politburo responded with a full-court press. Here's what Hedgeye CEO Keith McCullough had to say about it in a note to subscribers this morning:
"The communists did everything they could to centrally plan China’s markets overnight – stopped the Yuan at 6.516 and the State bought stocks! Lol – that went over as well as it did in AUG didn’t it? #GrowthSlowing and #Deflation remain the gravity point."
Oh, and let's toss in the Russell 2000...
"Liquidity-traps and US domestics slowing remain great reasons to be out of or underweight small caps – RUT -2.3% yesterday (vs. SPX -1.5%) and is now -14.4% from the all-time #Bubble high we called in July. We're reiterating sell on bounces."
We'll conclude with a parting thought to Wall Street consensus which was screaming "buy the dip!" yesterday:
"Buying the dip" has only worked in a narrow group of momentum stocks. The rest of the market is crashing.