by John Galt
January 2, 2017 19:30 ET
A quick sampling from the web before I begin:
Are We Being Set Up For A Crash? Stocks Hit A Level Only Seen During The Bubbles Of 1929, 2000 And 2007
For the readers of my blog over the past decade, I thank you but warn everyone:
Things are not what they seem.
While the usual suspects are promoting the bear market/crash scenario for stocks an old adage still rings true:
Markets can remain irrational longer than you can remain solvent.
Don’t believe me? Ask the traders in UWTI (not moi, however).
The key issue every investor faces is that 2017 is lining up to be the year of the peak bear. Everyone will be predicting a crash, a bear market, Armageddon, cats sleeping with dogs, 40 days of rain, 40 nights of sunshine, and President Trump taking his mask off to reveal he was a clone of Hillary Clinton all along.
After spending 2016 making money in gold and miners and then getting the hell out just after the top I feel pretty good. Oh, I’ll admit I took it in the shorts when I sold some lemons at year end but overall it was a good year. So why am I sounding contrarian to my bearish brethren about 2017?
Logic my friend, logic.
I do believe we will see a 5-12% correction due to Obama’s actions in the last 18 days of his administration. I also believe that after a booming start to the year to get us to Dow 20K, the markets will start sniffing Obama’s evil concoctions and discover his attempts to sabotage the Republicans and Trump initially. The instability created by the unstable socialist will cause some panic in traditional investors and if the Republican RINO wing hesitates on repealing regulations and especially Obamacare, the correction could accelerate well beyond a 15% downturn.
Thus the challenge for the bears; does a one time move to the downside mean a bear market or just a correction en route to even more absurd highs?
My vote is for the latter and in the upcoming annual absurd stupid insane prediction thread, I’ll peg my 2017 high for the Dow, S&P 500, and gold.
Meanwhile, trade safely, buckle up, and get ready for the ride of your life which is not recommended for amateurs or the weak of heart.