Rear Window

I keep looking for something I can't get
Broken hearts lie all around me
And I don't see an easy way out of this
--Cutting Crew

Here's the near term market scenario that I'm warming up to. Initially, optimism as credit markets find some traction, coupled with clarity over a presidential election verdict, sparks a multi-week or perhaps multi-month stock market rally. I wouldn't be surprised to see a 20% move or so--into SPX 1250ish.

The bloom comes off the rose in Q1-Q2 2009, as credit markets retighten and the economic consequences of the credit bust (e.g., unemployment moves towards 10%) become widely evident. A new round of bureaucratic interventions are enacted. Prices head lower, where we revisit and likely break below the recent October lows.

Such prognostications are nonsensical, I know. But it helps provide a working framework, sure to be revised, in the upcoming period.

no positions