So, for those of you new to my blog, I am certainly glad you have given yourself one of the best opportunities to read insights from a long-time professional trader. The goal of this blog is to inform our readers with the clearest insight as to the who, what, why and how of modern economics.
Dead cat bounce or does the equity market have what it takes to reverse that negative bear market stigma? As we highlighted over the last few weekly notes, we suspected the equity markets would bounce. However now, we feel that the euphoria has hit some technical levels that should put to test the veracity of this rally. We like to take a longer-term approach in times like this as everyone is all goosed up about the rebound, because fundamentally nothing has really changed. In fact, one can argue where fundamentals are concerned, the backdrop continues to weaken, global instability continues to gain, and the US government furlough seems to be foolishly overlooked.
What a ride the beginning of the year has been so far. As we warned in our year end and 2019 outlook, the equity markets were most likely set up for some bottom pickers to step in and show their support out of the gates.
Before we get into a review of the important facets of 2018, let’s look back and take a look at last years year end letter and take note of what we foretold.
One of the things we pride ourselves in is the fact that we do not take public information for face value, nor do we even contemplate the sources very much. That seems risky right, but in realty what we are being sold and who’s selling it are about as trustworthy as a 3 year old holding an ice cream cone without giving it a lick. In fact, we are inundated with various reports from all over the World Wide Web, main stream media, etc.