It was another brutal session that saw the market eschew all the narratives and go back to safe-haven basics. Utilities (XLU) led the way, followed by Real Estate (XLRE), Consumer Staples (XLP), and Healthcare (XLV).

All the hot trade stuff is collapsing, including the mid- and Small-Cap move, which got ahead of itself. 

Brutal Earnings Season

Meta (META) didn’t have coattails long enough to save the rest of the Mag Seven and the Technology (XLK) sector from being swept in the undertow of mass broad market selling.  It was every stock for itself.

Smaller chip names were anchors for semiconductors, which appeared to have regained equilibrium.

According to Goldman, this has been the most volatile earnings season since the financial crisis. 

The market plunged deep into the fear part of the Fear & Greed Index.

Here’s the real problem: with so much consolidated leadership, everything else has been a drag, and now that leadership is under pressure, there are fewer “winners” this year than in market history.

It's important to keep in mind that the abundance of cheap and oversold stocks doesn’t guarantee their future value. The risk of further devaluation remains a significant factor in the current market climate. 

Today's Session

I have been calling this for months. 
Gradually, then suddenly.
Economic data this week shows I was right. 
The Fed is behind the curve, and I have been the only one on TV pounding the table.
The "suddenly" is what is happening now, and why subscribers should be ready to make money, not panic.
The stock market is pushing the Fed around in hopes of action before September - that may not happen. The Fed officials must come out and  hint at aggressive cuts (now the Street is looking at 50 bps for September).
The stock market has been driven by the emotion of greed and instant success all year, looked and felt okay when the market was up daily.
But market breadth wasn't up every day, only a few stocks with an outsized influence on the S&P 500 were up.  The current pullback proves that many buyers have not learned or believed in the value proposition. 
The value proposition is intact and more significant than at the start of the year. 
It is going to happen.  I have seen it many times, not understanding that the real tug of war is between markets (equities and bonds) versus the Federal Reserve.
The emotions have shifted from giddy to petrified, and the selling will be excessive (in most cases, it already has been).
I have seen this movie before. 
Selling positions in companies with solid fundamentals (organic growth, pricing power, margin expansion, execution and guidance, and taking share).
This action is the market pushing the Fed - please take care not to panic.
I have seen this so many times doing this for 35 years.
It is time to have some cash to take advantage of the automatic selling.