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Wide Awake

I'm wide awake.

I shouldn't be because it's 2:38 a.m. But while our congressional "leaders" dither, the fabric of our society frays at an ever-alarming rate. The rhetoric has been about a revolution, but what we really need is an awakening.

The number of people dying from the COVID-19 pandemic is staggering. The tally is comparable to other singular events; 1918 Spanish Flu, World War II, or 9/11. The sheer toll is nearly unimaginable. Sadly, we were ill-prepared.

The problem now is not that tragedy has befallen us. It's not about affixing blame for who didn't do this or that. It's certainly not about talking about how resilient we are. People who lived through The Great Depression and World War II were resilient, but they still had to suffer through it. So will we.

It's about what to do right now. It's about simple survival. Not just from the virus, but from the impending economic fallout on a scale we've never before encoun…

Is Hibernation Over?

Before we begin, let's make one thing perfectly clear. Don't panic! I repeat: Don't panic!

With that out of the way, let's examine the landscape after last week's harrowing market plunge. In a matter of days, the markets were taken apart in spectacular fashion, dropping into official correction territory. The underlying catalyst was the uncertainty of the impact a coronavirus pandemic will have on the global and U.S. economy. In short, FEAR.

Fear though, also provides potential opportunity. So the question at this juncture is are we poised for a rebound or further erosion? If you've read my past posts, you know I've had an abundance of caution as the markets continued a meteoric rise. I'm still cautious, though I won't be surprised to see a relief rally before it gets worse again.

Whether the coronavirus will ultimately be managed effectively remains to be seen, but some damage has already been done. China, arguably hardest hit so far, is the driver…

Predictions and Reality

Let's get right to it...my outlook prediction back in September 2017 has proven to be totally wrong! My abundance of caution around that DOW 22,000 level was overrun in a stampede not seen in quite a while, reaching all the way to 26,000 with nary a pause. Simply incredible. And yes, I missed it. Do I feel foolish? How could I not. My only consolation was that the stocks I typically use as my proxies, like steel and GE, didn't enjoy the ride. So, I missed it and I didn't. I definitely exited some tech names like AAPL, CSCO, and TSLA too early though.

Am I changing gears yet? Nope. The sheer ferocity of the advance reminded me too much of the dot-com bubble. Remember that one? Easy money in anything with a website. Until the bottom fell out. I'm not making the argument the dynamic is the same, just that as a trader, the markets felt scary to me in the same way. The cryptocurrency market is definitely the same dynamic though. At any rate, I'm still optimistic but als…

An Abundance of Caution

The markets have surprised me this morning with an early 1% upside advance. Despite continued saber-rattling from North Korea and devastating impacts from Hurricane Irma, the market is demonstrating impressive resilience. Just last Tuesday, the indices had declined to August 17th levels, recent low territory, and I really thought the long-awaited correction was beginning. Once again, the current Bull proves tenacious.

My outlook, however, remains similar. Overall, I think valuations are too high. We'll see if the market continues to discount the impact of North Korea rhetoric if further sanctions are adopted later this afternoon. North Korea aside, it's the unexpected event to fear most. The country has experienced two devastating hurricanes in less than one week, with another potentially looming. Economic disruption from these is inevitable, but I think the magnitude is currently being underestimated. Hurricane Harvey saw an immediate 10% rise in gasoline pump prices and with…

A Solemn Remembrance

It was a crisp, cloudless, blue sky morning, not unlike this morning. An incredibly beautiful day...until the unthinkable happened. Peaceful bliss was shattered irrevocably and the world changed in an instant. The innocent loss of life was staggering, completely unfathomable. It's hard to believe that 16 years have elapsed since that horrible day. My blogs usually "go dark" on September 11th, but not today. Never Forget. Today, I choose to remember...and to briefly share a few memories.

If you're old enough, you remember exactly where you were when the Towers came down. I was at work, getting prepared for another day of trading. It was Tuesday. The North Tower was struck at 8:46 AM. It seemed like a tragic accident. When the South Tower was struck shortly thereafter at 9:03 AM, it became alarmingly clear we were under attack. Needless to say, the markets didn't open and wouldn't until the following Monday.

So many of us lost dear friends or family that day. T…

Prognosis Negative: Congress, The Fed, and Geopolitics

The markets continue to defy gravity. Nearly every day they've been reaching new highs. I'm concerned, and have been for a while. There's an awful lot of complacency permeating the market currently. I believe the day of reckoning is approaching, likely before August concludes, but probably no later than mid-September. I think a correction of 10% magnitude wouldn't be surprising, but I'm guessing more like 7-8%. Whatever the actual quantification, there will be an unraveling. Don't freak out - it's long overdue and should provide a nice selective buying opportunity.

There are several factors coming to the fore that I think alone or in combination could be the catalyst for a market decline. Let's examine a few of them briefly.

First, the market has been on a tear without any meaningful pullback. A big early part of that was Trump euphoria. The new administration made bold promises that many believed would help stimulate the economy. Those promises include…

Filtering The Noise

It's been said, "Information is king." True enough. We live in an age where technology has made information accessible and abundant in real time. That's good, to a point. The problem arises when there's too much information. It's a 24/7 information bombardment now. It's all urgent too, or so it seems. Even the weather is a full-time breaking news event. Added to that, every Tom, Dick, and Harry (and even some upstate guy named Mike) has an opinion on what it all means. And those opinions run the gamut from one polar opposite to the other. Ever watch CNBC? Then you know exactly what I mean. The truth is that the vast majority of the information we're pummeled with is Noise.

Noise? It's the stuff that's irrelevant in the grander scheme of things. It's a distraction. Many times it elicits emotional responses, like fear. It often seems so important. It's not. Don't get distracted.

The trick to effective trading decisions (or any decisi…