Risk: Once Again - Watch 5,800 on the S&P 500 - Yellow

A line in the sand is a line in the sand.

Dear Fellow Expat:

This doesn’t feel over.

Energy is cracking lower; cyclical stocks are moving up (but as predicted, Carnival Cruise Line (CCL) is falling further.) Homebuilders look like a solid long-term play after the recent move into oversold.

This all comes down to the bond market. Until we see the S&P 500 really crack under 5,800 and the S&P 500 ETF (SPY) break under that 20-day line, we should remain cautious and continue to hedge.

I was asked what I thought about the election and the markets yesterday. And I said the same thing: Lots of money will flow into the system - and there are more things out of the next president’s control than things they do control.

That includes debt, OPEC, China, the Fed, and global capital flows.

Volatility is coming. Especially with so much refinancing on tap for 2025.

Also - I’m seeing a HUGE wave of post-COVID borrowing for refinancing in… 2028.

There’s your six-year cycle from trough to trough.

Keep dancing…

And stay positive,

Garrett Baldwin