Boom! No Santa Rally For You!

by Chris

Well, after some very heroic overnight futures lifting, and then many shuffles across SPX 2500 as “The Dance of the Big, Round Number” dutifully plays out, the US equity markets are once more headed down in earnest.

There will be no Santa rally this year.

Coal for everyone.

Well, except those properly hedged and those hiding out in cash and/or Treasuries.

To me the really big story is this one right here:

Coupled with a very wide variety of other global indicators all signaling an abrupt slowdown, “it” has arrived.

How long could this take?

Oh…several years.

If things track the 2008-2009 experience, which they never do but it’s always fun to compare, then we might expect 2020 to be the bottom.

The point here is that these things take time.  There will be rallies along the way.  Already I see people on investing chat boards talking about buying more, holding on, and otherwise having 100% ingested the Wall Street marketing that has convinced them they cannot time the markets and that therefore the prudent thing to do is hold on for dear life.

My good people…cash IS a legitimate position.  So are bonds.  It is completely defensible to have a strategy that says “sell high and buy low.”  Currently stocks remain wildly overpriced.  No shame in observing that and stepping aside, or otherwise protecting yourself.