The US equity market is now approaching a key zone of volatilty that could, like in December 2018, be punishing to those who are taking excessive risk. As mentioned in previous comments, look to cover shorts into the sell-off but be cautious about being too aggressive on establishing new longs.
Some of my readers are very interested in equity markets but do not trade. However, for those who are interested, look at the December sell-off in US equity markets. We are seeing the emergence of patterns that look much like the shock that took hold of markets in December 2018 – it was ugly.
Finally, FANGS will underperform – but we want to buy these names after the broad market has experienced one more capitulation sell-off.