And when old Swannee flew, all of our BEGOS Markets (Bond / Euro / Gold / Oil / S&P) were initially flushed down the loo, of which mildly (by comparison) were two — the Bond and Gold — as we graphically review:
The above seven-month stint from the beginning of September 2008 through the end of March 2009 found the S&P 500 (closing price basis) down as much as 47%, (and moreover Oil down as much as 71%). Yes Gold suffered, but relatively less so in falling 15%, whilst the Bond’s loss was at most just 4%.
However: come the end of that carnage-filled run, Gold was firmest +11% whilst the S&P was still -39% with many an investor especially at the retail level having been capitulatively smashed in the process. Chances are you know of some who were, indeed may have been one yourself, (congrats thus being in order if you’re still around).
Yet now our notion is “Here We Go Again”. And as dumb-downed amongst financial writers as has become the word “crash”, we are measuredly cautious to ever to use it in a missive’s title. Across the dozen years of The Gold Update, only twice have we so done: once as a suggestive query during November 2013 and once during the “Gentlemen’s Crash” of late summer 2015. That’s it.
Even more exasperating given the bazillion reasons for the S&P 500 to imminently crash, the fact that it hasn’t means it shan’t … you veteran traders know exactly what we mean by that. (Or in chiding a trading colleague this past week, “The instant you go Long the S&P, ’twill be over.”)
But indeed, why crash, whatsoever? So sophomorically silly is such notion. After all:
■ We’re having a terrific Q4 Earnings Season with 79% of the S&P 500’s constituents beating estimates (“shushhh … only 59% have improved”);
■ Interest rates are all but zero (“shushhh … the yield on the Bond now is above 2.0%, that on the 10-year Note is up to 1.2%, and for the all-to-lose S&P ’tis only 1.4%”);
■ Americans now “flush with cash” are buying stock as COVID limits their…
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