August 15, 2020

In search of Crisis Alpha for its Clients

Shortest bull markets in history based

The risk markets are experiencing epileptic seizures. From erratic and violent outbursts up and down and windmill swing of 12% up and 12% down by the Euro/Dollar. We have witnessed the shortest bear market in history lasting five weeks, knocking off 37% in profits from high to low by the S&P. Followed one of the quickest bull markets since the 1930s lasting five months from the low to date and recovering all of the previous bear moving higher by 38% on average, pushing new highs.

And there is more with the great bull run by the gold of 42% in four months followed by a four-day 10% selloff. Contrary Thinker is expecting Bitcoin to be next on the big swing.

Advisors and capital managers are witnessing the most frequent run-ups in long VIX interacting with CB interventionist policy, responding to an economic and financial crisis. The unwinding of the pre-emptive monetary policy will not end well. They never do, and it is merely because there is no way to grow out of this amount of debt.

According to Ray Dalio, there are seven factors that the trained eye can see that rings the bell for a pending bubble ready to burst at the most straightforward outside event. Here is the checklist allowing you to check off on all the reasons WHY the markets should go into a bear market – both bonds and risk assets, if there is a difference anymore.

This work by Jack Cahn is licensed under a Creative Commons Attribution-NonCommercial 4.0 International