Hey Monkeys,

Wondering what your thoughts are with key factors that are going to lead to the next U.S. recession and your timing expectations. Haven't seen any 2018 posts, also interested how you're positioning yourself for this year.

While I'm still riding the bull conservatively, its hard to figure out (of course) what the key factors will bring the angry bear before its too late to react.

Some Bearish Observations
Historically speaking (1900-present), way past due for a recession
Developed and EM-relevant Countries public (and private) debt continue to rise to unprecedented ratios with not too much concern addressed to public, to be expected
BAC Bull/Bear Indicator (one of many)
U.S. bond yields rising, 10 year have reached highest in 3-4 years, even though investment occurred from fund having to re-balance after markets continued to reach new highs skewing portfolios . Meanwhile USD weakening, and expected reverse-correlation with safe haven commodities didn't rise as expected
Oil inventories down in U.S. hubs during winter
Country relationships/tension

Some Bullish Observations
Investors continuing to pump money into markets, most likely pressure from missing out on more gains; note I haven't dived into fund flows though.
High Long Short Interest Ratios
Markets still climbing (ignoring today) to record highs
Irrational Market
Growth in sectors that haven't performed as well as they should looking at FA

My stance: Ride the end of the bull but be prepared; a lot of calls with different expiries. Closely follow leading market sentiment releases and attempt to predict macro market trends, not trading based on minor-moderate political news.

Comments (1)


1-Click to Unlock All Comments - 100% FREE

Why do I need to be signed in?
WSO is a knowledge-sharing community that depends on everyone being able to pitch in when they know something.
+ Bonus: 6 Free Financial Modeling Lessons with 1-Click Signup ($199 value)