Presenting the Bear Side, lets go to numbers.
October marked the end of the attempt to test the highs made five years ago in 2007. Market should decline for 60 months some 800 to 900 points in the S&P and then, if that is not bad enough, test those lows in 2022. I guess that is another lost decade but at least interest rates will be low. Refi at 0 with no points and the bank will throw in a vacant home in another state.
Looking back; October 1997 had a low 844 and 2.5 years later market made all time high of 1574 in 2000. Market then declined to 767 in October of 2002 completing the 5 year cycle. To speed this up, the market made a high of 1587 in October of 2007 and made a low of 666 in March of 2009 and then we are right back up at the top of the previous paragraph.
But the Bears believe not just in cycle dirt, but in potential world class screw ups. Bears believe any multiple combination of hits behind the four doors of the Apocalypse will send equities into a serious down. Door one; Fiscal cliff. Door two; Europe. Door three; Middle East. And door number four; Chinese Recession.
