This is No Little Deal

We are looking at the end of a Nine Year Artificial Bull Market.

There is a whole generation of young traders who have never worked with a real market.

With the bounce rally completed , overnight the S&P even stretched to the maximum Fibonacci 62 % level of 2745,   here are factors holding things together?

A little analysis of the setting shows us:

  1. Most investors and traders think that if the market is to come undone, it will be because of Inflation and Higher Interest rates.
  2. For me, I think deflation is the Macro pulling direction.  In the short term the buildup still unfolds, but going forward, Slow growth and sloppy earnings created by trade and deficit issues are the Achilles heel in this scenario.
  3. So watch GDP (some economists see only a 1.5 % rate in the first quarter, watch GDP Now) , retail sales, housing starts, final demand issues, etc for clues to how this is going to unfold. Technically stocks have topped. Next week will provide technical confirmation.
  4. In the meantime we key on running our Risk – Offset portfolio, getting out of individual positions occasionally when excess levels are reached,
  5. In the main and now, long T-Bonds, Long Gold, Short Oil, and Short Stocks.

Posted at 7:33 AM CST, 2/16/18

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