Dow Jones Industrial Average
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ride for equity investors – whether the rally continues a bit more or not. I’ve been scaling into equity put positions during the fall (October and November expirations) for this very reason and will continue to do so on strength, looking at December expirations and even beyond. In all my years studying and trading the markets, it is always the U.S. equity markets that are the last to “get the picture.” There are valid reasons for this – it is the strongest economy and has the best companies. But it is also the incessant focus on earnings, which are lagging indicators , that can lead the equity markets a bit higher when so many other signals are sending a warning. This looks to be the case yet again, now that earnings reports are complete, and the divergences are still intact. And the 90-year cycle is another indicator suggesting that trouble is on the horizon.
crash and I’m NOT expecting a depression or a repeat of what happened with the crash of 1929. This isn’t some doom-and-gloom, end- of-the-world claim... The point here is that the advance this year based on the 90-year cycle is nearly identical to the 1929 advance in both time and price, and what lies ahead is troubling . This simply provides me with more evidence that rallies should be sold, and it supports the round-trip market outlook. I have no doubt that the Federal Reserve will be forced to cut rates again (more than it prefers to), which will limit the downside within equity markets, but not before at least a 10% decline – or perhaps even more... This is all part of my round-trip market prediction. With earnings data complete and the trade war intensifying, there aren’t many catalysts to support the market before then. Calling exact market tops is difficult, but the evidence continues to pile up that the next month or two will be an uncomfortable
American Consequences
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