REALITY CHECK: Old Wall perma-bulls flat-out missed the crash in the Russell 2000. We didn't. We warned you about this precarious setup back in July.
"Isn’t it ironic, but not surprising, that the “U.S. is the best house in a bad hood” thesis has crashed too," Hedgeye CEO Keith McCullough wrote in a note to subscribers this morning. "The Russell 2000 is now down -22% (crash mode) from its July 2015 #Bubble high as U.S. domestic growth expectations move toward a #Recession."
You won't hear most people on Old Wall talking about the DAX this morning. Probably because that's crashing too.
Here's McCullough on the evolving Old Wall storytelling on Europe:
"Right back into crash mode goes the over-owned “this time is different” in Europe theme. The DAX is down -2% this morning and down -21.1% since the April 2015 top. ECB President Mario Draghi is going to have to defend this with Down Euro = Up Dollar = #Deflation."
As for us (and our subscribers) we'll stick with our repeatable risk management process. If you're interested in joining us click here to learn more.