Not a lot of poetry or prose again this week. We posted much material on our thoughts over the last few days. Have a look.

Also review the data tables below.

We do think markets are in for a bounce for a few days, but we believe we are far from out of the woods.  Credit spreads are starting to wobble.

Historic Volatility Spike

Only three times since 1950 has intraday volatility jumped so high as measured by a modified version of the Average True Range:  1) September 1955 after an extraordinarily period of calm the S&P500 tanked on September 26th when markets opened after President Eisenhower’s heart attack on the 8th hole of Cherry Hills Country Club over the weekend. The market quickly recovered; 2) January 1962 when the “Kennedy slide” began to accelerate; and 3) the October 1987 stock market crash.

Kennedy-Trump S&P500 Analog

This market is starting to look very similar to the JFK post-election rally, top, and bear market, which eventually bottomed when Khrushchev backed down during the Cuban Missile Crisis. We will post more on the JFK-Trump S&P500 analog later in the week.

We were planning on doing it later today but have to visit a dear friend in the hospital.

JP

Do us a favor.  Shoot up a prayer, send and think good thoughts, light a candle, or whatever works for you for our good friend JP.  We love him dearly.

He is a true American hero and a such a great and decent human being.   Think of it as your cost of admission to the Global Macro Monitor and duty to the international brotherhood of man.  No political correctness here.

If only the world were full of JPs, we would be in such a better place.

Please fight hard, as you always do, and get well, my brother.

This Week

The key on Sunday night is to watch how the Hang Seng trades.  It should have a big bounce, followed by rallies in Europe, signaling the U.S. market has some legs.

Most important, however, is the action in the bond markets. Higher interest rates will snuff out any bounce and continue to reprice equity values at lower levels.

Good luck this week, folks.

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