Short

All US market index are down as trade optimism fades by the minu

and all other US features are down after trade deal optimism systematically got unwound by the hour, if not minute, moments ago the Global Times' Business Source group said that that China will release an "unreliable entity list" soon, which includes relevant US entities.

SPX future was down at mid-day and it went further down after Being threats publication of new entity list two hours after Wilbur Ross said that "absent a deal by Dec 15, the US fully expects to hike tariffs on Dec 15" that deterioration the likelihood of a phase one trade deal.

Market was overbought by all accounts such as RSI, StocH, valuation, weak earnings and negative EPS, week ISM manufacturing data, slow down in growth in Europe, India recession, Chines 6 major banks default to name the few.

So, as investor you need to ask why market rallied without any pullback from Mid Oct in absence of any data, even defying the natural rather of pull backs and correction that is normal even for a genuine bull market. There are many underlying reason, here is a few simple one:

Market makers and Wall Street Hedge Funds are/were aware the high stock valuation can not be sustained and this vertical rally can not continue on low volume without investors participation. So, they have pushed the market 6.7% above the last correction to cushion the % fall. It is a simple mathematics. So, the next major correction would bring the market down to the 3000 level which was already too high.

However, they underestimated one caveat. FEAR is more powerful than greed. VIX has been crushed for month and it is now a spring loaded with fear. The drop in the US equity market will be much sever for this one reason alone. I can sight many macroeconomic reasons.

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