Markets are going nowhere.
Actually let me be more specific.
Risk is going nowhere.
No, I am not predicting market direction. I’m talking about the past. I’m talking about the appetite for risk by the markets for over a year now. While I may adopt a ‘bullish’ bent on the markets for a 10 day periodicity now and then, the last year in the markets have painted a very clear story. In December 2014, we were trading at about 2080 on the Spoos. Fifteen months later, we are at 1912. Bonds, post-taper, have remained elevated or simply headed higher.
S&P 500 Index
Last 14 Months
Japan. Oil. Negative interest rates. China. The Fed. Equity valuations. Come up with whatever narrative you want. But price is telling us a very clear story.
The relief rallies should continue to be wild, and brief. However it’s best to be flat on ‘risk’, or hedged.
So yes, while I may play brief rallies from time to time, on a longer term basis, I’m more bearish on the longer term.
Because that is the road the market has been traveling for the last 15 months …