Time Target Acquired, Election on Deck

Our time target for the bull market will be registered on election day.

Of course, there must be a (+/-) tolerance built into the time target because who among us is a legitimate Swami, able to read the future in pin-point fashion? None of us, that’s who. Least of all, those perma-wrongs that the media will one day tout in eyeball harvesting headlines.

e.g. Man who predicted 2025 bear market and recession has a new prediction

Problem is, they never mention how long “man” was wrong before he was right. Some off brand Swamis are wrong for vast majorities of previous bull markets. Some, for all of the previous bull markets. But the media rarely let a good hook go to waste. So for the sake of ever-important credibility, I’ll supply you one historical post (of many) stating “into and through the election” for the intact economy: February Payrolls…

But I’ve been parroting “into or through the election” all year long. So when I get bearish you know it is somebody – right or wrong – who is not talking his book. My book compelled a bullish view all year long, despite the gathering storm clouds in indicator-land.

Back on the subject of misleading media, as illustrated in this article from September, the media have most recently been advising the herds that all’s clear economically because the Yield Curve inversion has ended. Our oft-stated view (based on facts of history) is that the clock starts ticking on economic troubles after the inversion ends and during the new steepener. Well, here is your new steepener after a terrible October Payrolls report.

cnbc.com

So we arrive at the key time window with one economic bust indicator intact. We also arrive with this terrible indication in play, as it has been all year. The damage (of the divergence) has already been done, regardless of subsequent moves to come. The stock market is putting on a fine display of being out of touch with the reality of 2001 and 2007 era divergences that preceded major bear markets.

Today, this election year, the media feed us happy stupidities like “it’s okay now, the inversion is over!” (pertaining to the above) and “the Fed is not tardy to its rate cut cycle, Goldilocks soft landing ahead!” (pertaining to this chart).

Combine that with the sector employment data from Friday’s Payrolls post and you see that if not for our heroes in government, the reading would have been a negative print. That’s rather significant, don’t you think? Separately, look at the Manufacturing sector, dropping into recession. It’s just embedded Health services and Government keeping this mess afloat.

BLS

As for the stock market, we’ll simply continue using technical analysis to fine tune the view, functionally. We can have all the negative macro data in the world, but until a critical mass of casino patrons gets the memo, the dumbest of money will continue to MOMO and FOMO the markets. TA allows us to respect trends but put us on guard for change when those trends start to falter.

We are at the time window and now things get interesting. In my opinion, risk should be managed like never before. Not overreacted to, but managed. That means taking profits, limiting losses, sector awareness from the macro top down, applying macro indications to positioning. Also, speculators might want to be aware that shorting is still a thing. It could be a rewarding thing well into 2025.

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