Back from The Beach and Weddings
Posted on Sunday, September 16th, 2018
We had a tremendous response to our last post – Wanna Save $100,000 on College? Thank you all so much. We hope that we changed your thinking on college and put the ball more in your court. One interesting response that we had was that we should apply the same thinking to weddings. Great suggestion! I love hearing from people from people with life experience.
We said that the S&P should retest the area that it broke out of and that was the 2850 area. The market retested the 2865 breakout. Close enough for government work. We now appear to be stuck in a range between 2865 and 2915. The market has broken out higher but there seems to be little conviction and follow through. There are great concerns about emerging markets, high valuations and disconnect between world markets. World markets, generally, are lower on the year while the S&P 500 in the United States is higher. This disconnect is getting a bit unsettling and could be a warning sign of contagion. Keep an eye on emerging markets like Argentina, Turkey and South Africa. The US Dollar is the key.
As usually we see some influence from the calendar. We are creatures of habit as humans and that effects markets. After Labor Day each year we see a reset. It is almost as if the real market movers are back from the beach, look at their underlings and say, “Yeah, yeah yeah. So much for what you junior investors think of the market. Let me take a look”. It is one of the pivotal moments in the market calendar. You need to be on your toes. The real market trend, the one that counts, with volume and conviction, happens post Labor Day. We have had a breakout here above 2865. Is it real? Or was it just the junior players on the desk moving thin markets. The players are back. Let’s see what they think.
Fascinating week as some of our favorite investors were out giving interviews and webcasts. One was Ray Dalio from Bridgewater. He published a free pdf titled “A Template for Understanding Big Debt Crisis”. If you don’t have time to read all 467 pages you might want to read the first 60 to give you an idea of what Ray is saying. Better yet you may want to watch this 10 minute video from Bloomberg where Ray outlines his most important points to consider and how to act in the coming market. Ray’s big concern is that in the next two years there could be a US Dollar crisis. Praemonitus, Praemunitus Forewarned is forearmed.
I think we aspire less to foresee the future and more to be a great contingency planner… you can respond very fast to what’s happening because you thought through all the possibilities, – Lloyd Blankfein
To learn more about us and Blackthorn Asset Management LLC visit our website at www.BlackthornAsset.com .
A pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every difficulty. – Winston Churchill
Disclosure: This blog is informational and is not a recommendation to buy or sell anything. If you are thinking about investing consider the risk. Everyone’s financial situation is different. Consult your financial advisor.