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Stocks are selling off hard this morning.

This is no surprise and if your strategist hasn’t been warning of a correction, you need to get a new strategist.

In investing, nothing goes straight up or straight down. And since April, stocks have been on a historic run. All told the S&P 500 has gone over 120 sessions without touching its 50-day simple moving average (DMA). This is the longest streak since 2011 and is the 3rd longest since 2000.

This STRONGLY suggested stocks were due for a pullback to the 50-DMA. For this reason (and numerous others revealed to private clients two weeks ago), I’ve been warning our clients NOT to aggressively buy stocks. Instead, we’ve been in “watch and wait” mode as we prepared for the coming correction.

The wait is over.

The S&P 500 is a sea of red this morning. And by the look of things there is plenty of more downside to come. High yield credit, which usually leads stocks both the upside and the down is signaling that the S&P 500 has a date with the 6600s.

Breadth, which also usually leads the S&P 500 is signaling a drop to the 6,700s.

Both of these are right in the ballpark of the 50-DMA for the S&P 500. Taken together, they strongly suggest we’re going to see a pullback to the 50-DMA. The big question for investors is if this is going to be a garden variety correction or if it’s the start of another bear market/ crisis.

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