Biggest Take Away at the Moment
The Market is still in Disbelief
One has to keep in mind that the move on the S&P from 3393 down to 2722 was just an adjustment to a manipulated over priced market.
Secondly I hear analysts say that an S&P price of 2450 is kind of a 16. 0 P/E based around a 10 % drop in earnings.
So, the market seems to be trying to hang on to an optimistic earnings view.
The record stimulus is reinforcing this view and more funny cheap money adds to support.
Our view, we are on an out cropping that is getting crowded, but the situation could turn either way kind of a 505/50 situation in the short term. If stocks go down it will trigger a real cleanout. On the other hand the market wants to go higher, it all really depends on how the Whitehouse manages things at this point.
Gold may be one choice here
Based on chart analysis, we could see Gold double in price over the next six month to the 3000 level.
Bonds will be Tricky
We are looking at the end of the macro up move that has worked its way higher over the past 40 years. The TLT bond ETF could see the 196 level (168 at the moment)