Third Time Not Charming

Hopefully yesterday's update made it clear: the market plunged back into a correction yesterday.

In 2017 we never had a market correction that pushed us to raise cash over 50%.

In 2018 it has happened 5 times.  The first in early February after the talk of tariffs was heard in the land.  Then in March as trade/ tariffs and interest rate increases ganged up to mug the bull.

Late September we noted that distribution days were piling up and we started to raise cash.
By the second week of October we were in a full-blown correction.

Since then we've been in a downward saw-tooth pattern that encourages the trader that a short-term bottom has been reached only to slap another correction on the bull's nose days later.  November 21 and now December 17th make it 3 corrections since the second week of October.

Everyone looks for causes.  The only thing that matters really is the market direction and volume.  It isn't unusual for a market to sour when things look good -- although the best employment numbers since the mid-60s seem like an odd backdrop for stock market wreckage.

But, everyone is free to take their pick of causes for a 20% drop in prices... it's overdue, tariffs, trade "war", election results, interest rate hikes, FAANG failure.  And guess what, when the market heads back up people will say, "the market climbs a wall of worry."

What if the FOMC shocks everyone and holds rates the same Wednesday afternoon?  Will markets go up on rocket fuel or will they fall further because the "Fed must see disaster coming."

See, anybody can play that game.  In fact they're on TV all day opining endlessly.

Hit MUTE and watch the direction and volume.