Alternative Path

[gdl]

SMOOTH SAILING! We have nothing between now and Thursday of next week to cause any derailment. In fact it should stay on the same trajectory.

I suspect the data will show stubborn and even higher costs while manufacturing data shows a strong improvement solidifying the fact that we are in a heated economy even as big-ticket items stay muted.

China finally getting its act together. That will create a double bump in taming inflation. I had thought China would already be contributing but better late than never.

Shiller SP500 is already above a 37 times P/E ratio exceeding even the 1929 peak of 31.

Like anything presented to this nation we seem to close out disasters and focus on a dream scenario. The combination of disasters will put a massive stop to the economy and the worlds to boot. The next greater depression should be recognized only 3 to 6 months AFTER a crash. We will assume it is a great opportunity to buy into the market and ONLY hard data in hindsight will cause a fatalistic response.

For now we are in the last blowoff stage. Since we ignored a 100-year Pandemic with all the science behind it and likewise the anti-Christ persona and finally an environment about to unleash its wrath. Let's not forget the universal assumption that it is impossible for inflation to heat up because we have developed a new paradigm where disinflation is guaranteed.

Market path: We seem to be on auto pilot till late next week and most likely any disruption will quickly be taken up till middle of March. It should be a significant top with some fast wild steep drops. Should not however we straight down. That should happen in either JULY or October. History places these months where major turning points occur.