Below is a brief excerpt transcribed from Tuesday's edition of The Macro Show hosted by Hedgeye CEO Keith McCullough.
I don’t have to call for a crash anymore.
I told you a crash was likely, and the probability was rising when the Fed made their panic rate cut mistake. And again, I said that on time. There were people who had a process to make this call. Now I don’t have to call for a crash.
Why?
Cause sh*t crashed. When you look at the Russell 2000, it's down -25% from where you could have bought it at the full investing cycle peak. Look at the sector perspective on this chart.
Don’t forget in Quad 4 we want to be short Small Cap stocks, the Russell 2000, Energy Stocks, Financials stocks, Tech stocks, and Industrial stocks.
Look at these "drawdowns". These aren’t drawdowns! -20% in a day is a crash. Never mind -43.5 % for the year to date.
That’s an important thing. The Financials have obviously been eviscerated. They’ve crashed down over -25%. You can see that they were down over -10% yesterday.
Its pretty easy to call a crash as it's happening, because that’s simply what they are doing.
Remember: Do what the market is doing. Don’t do what you would hope for it not to do.
