Monday, November 9, 2020

Worst-case scenario

The worst-case scenario for the equity markets is a full-blown Constitutional crisis, keying off the Electoral College meeting 14 December.  It is a real crisis, sure, made exponentially worse by all the leverage and insolvency loosed upon the world.


Titanic vs modern cruise liner


This will only end when the Fed announces ambitious monetization and purchases of index ETFs at the January FOMC.

IMO this is the severe but brief deflationary shock that everyone on Real Vision expects to happen one of these days.  But who will catch it?


S&P 500 worst-case



12 comments:

christiangustafson said...

IOW bidless gamma monster black hole to the lows.

T.Berry said...

no change to my 2018 call for s&p 4,000 in 2021 and a strong possibility of an overshoot to 5,000 within 18-24 months after 4,000 goes down. (jpm just raised their 2021 target to 4,500).

still no reason to sell if you have a 2-3 year timeframe. 2021 should be a pretty solid year for us markets as we get back to normal.

Randall Beehomes said...

Dingleberry is all in. Yet the economy can't function with a 1% 10 year. Hmmm

T.Berry said...

been all in for 7+ years : ) (or as long as randall has been calling for s&p 600 lol)

Kirk said...

It's all about the Great Reset now.

https://www.youtube.com/watch?v=mSwYs6zB6TI

christiangustafson said...

Every legal vote -- visit now.

christiangustafson said...

T.Berry, support is around the 506 level S&P, we will see.

christiangustafson said...

Interesting end scenario, with .mil getting involved., ymmv. Probably means S&P 500 at 500.

T.Berry said...

cg, i remember when naz 6850 was the "absolute final top" and the crash was going to happen once hit. it would signal the start of the "decade of zero return"----that was back in oct 2017. glad i didn't take that advice. not sure which "guru" it was, nenner or armstrong. either way, they've both been wrong.


naz is up over 72% since that top. i have no worries the s&p isn't going to 4,000 in 2021. we'll probably see the naz north of 14,000 too.

will remain all in for the foreseeable future--the fed continues to do a remarkable job with monetary policy. i would never underestimate powells or the feds capabilities. they've been spot-on for over 11+ years. their track record speaks for itself.

Prechter said...

T. Berry,

The Titanic was considered unsinkable in its day too!

Hope you get on one of those lifeboats when the iceberg hits or an icy grave awaits you bro! :))

T.Berry said...
This comment has been removed by the author.
T.Berry said...

thanks prechter, i do have a plan and will begin executing sometime in the latter half of 2021.

2020 has been a pretty good year ....considering......

my 2020 targets

nas 10,300 blown out hit in june

s&P 3600 hit in october

dow 31,000 waiting......



depending on how strong holiday sales come in i think we have a 10% shot at hitting s&p 4,000 by year end 2020 ..we'll likely see the largest increase in holiday spending in us history and possibly by a very large amount.