BIBL BIL BXUB BXUC CHGX CLTL CRF DDM DFVL DFVS DIA DLBL-OLD DLBS DMRL DOG DTUL DTUS DTYL DTYS DUSA DXD EDOW EDV EEH EGF EPS EQL EQWS ESGL FEX FIBR FTT FWDD Games GBIL GOVT GSEW GSY HUSV HYDD IEF IEI ITE IVV IWL IWM JHML JKD OMFS OPER OTPIX PLW PMOM PPLC PSQ PST QID-OLD QLD QQEW QQQ QQQE QQXT RINF RISE RSP RVRS RWM RYARX RYRSX SCAP SCHO SCHR SCHX SDOW SDS SFLA SH SHV SHY SMLL SPDN SPLX SPSM SPTL SPTS SPUU SPXE SPXL SPXN SPXS SPXT SPXU-OLD SPXV SPY SQQQ SRTY SSO SYE TAPR TBF TBT TBX Terence Reilly TLH TLT TMF TMV TNA TQQQ TTT TUZ TWM TYBS TYD TYNS TYO TZA UBT UDN UDOW UDPIX UPRO URTY USA USDU USMC USSD UST USTB USWD UUP UWM VFINX VGIT VGLT VGSH VOO VTWO VUSTX VV ZF ZROZ

Auto Pilot | Seeking Alpha

SeekingAlpha

We’ve got been fairly verbose in our weekly ramblings, so we’ll try and be a bit extra succinct. We’re firmly within the grip of a bear market. The large query is, how deep will this bear sink?

We noticed help as being round 2300 on the S&P and we obtained help at 2350. We anticipate that degree will now must be examined once more within the coming weeks to see if it holds. Our help degree was 2550-2575 because the decrease finish of our current vary. That’s now resistance. The market isn’t oversold anymore, so rating one for the bears, however the brand new yr will usher in new pension cash, and January has a robust historical past of features. Rating one for the bulls. Institutional buyers are underexposed to the market now, and we might proceed to march greater, however the greater danger continues to be to the draw back. Merchants and buyers could also be trying to lease this rally to attempt to seize some positive factors. We all know we’re, having bit into this market under our 2425 goal. New cash might push market previous 2550, however most can be trying to promote the rip as a result of buyers are in a damaging mindset because of the current selloff and can look to see if the 2350 low is to be examined once more. If it fails, we see 2100 as the subsequent cease.

Bear market rallies are sharp and steep and die in mild quantity. We had that in bunches on Wednesday as we rallied 1000 factors on the day – probably the most ever. We search for sharp market rallies all through the period of this bear, and so long as QT stays, it is going to be Promote The Rip (STR). Markets sometimes transfer decrease in three waves. We’re within the midst of a bounce in wave #2 and see some alternatives.

We’re protecting an in depth eye on the US greenback. If the greenback has peaked, that could possibly be an indication that markets assume we have now hit peak central financial institution strikes right here within the US. Powell and pals could also be executed climbing rates of interest for a time. If that’s the case, then we’ll see a rotation into areas that profit from a falling US greenback. The issue for shares is the shrinking of the stability sheet continues to be on auto pilot. We consider it’s the stability sheet that’s the US inventory market’s drawback. When the Fed pauses the drawdown of the stability sheet, markets will breathe a sigh of aid.

“I’ve never made a buy at a low that I didn’t just feel terrible and scared to death making it.”

– Stanley Druckenmiller legendary investor

It is okay to be scared. Even one of the best buyers are. They only management their feelings and benefit from the state of affairs. Groceries are happening sale – make your listing. There’s extra to return in our quarterly letter. We made some purchases on Christmas Eve however are nonetheless underweight equities. Money has been king in 2018.

Pleased New Yr, everybody! Might 2019 deliver you’re keen on, luck and prosperity.

SeekingAlpha

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