Let’s look at some pictures of the developing risk situation in the US stock market, in light of Inauguration day upcoming on January 20, 2025, when the new president will be sworn in and his “Make America Great Again” jingle reconstituted. This group of indicators is far from exhaustive, as we use several other indicators and tools, many of which also currently forecast a coming phase when risk is to be realized, rather than just implied, as it is now.
While not an accomplished short seller by any means, I’d like to try to patiently set up to capitalize on coming bearish events as well. But that is a lesser priority when cash and quality equivalents should manage risk just fine – and pay out income along the way. Most notably now, the last two major sell opportunities, 2006-2008 and 2019-2020 came after the indicator had been slipping for extended periods . My contention is that the 2022 correction has been inappropriately labeled a bear market by a majority of participants and media. In 2022 the SPX trend remained intact to its bull market that began in 2009. It was a healthy correction, not a bear market. It all happened within one of those extended slips in the BMPM and that slippage is still in play.
There are many more market indicators and internals, from the Semiconductor > Tech > Broad leadership chain, to yield curves, to the still-intact divergence of the 2yr Treasury yield to the 3 month T-bill yield, to the combo of the US dollar and the Gold/Silver ratio, and so many other indicators guiding the way forward and providing us with a smooth, manageable path as they have all year.