…the ship that can never sink! But as per Murphy’s law, “whatever can go wrong will go wrong” and Titanic crashed and sank. We are experiencing something similar with the Markets.
When Titanic (Markets) took off, everyone wanted to get on board. People (Buyers) were dying to get a ticket (stocks) at whatever price they can get. Titanic gave them all they wanted (returns) and more. People were rejoicing and having the best time of their life. While everyone was on Cloud nine, they lost sight of the iceberg (FOMC) on its way. Now everyone is scared to death and speculation is high that crash is inevitable so they all want to get off. Sellers are ready to sell at any price, but looks like buyers are on strike since there is no catalyst in sight. Fed took away the punch bowl and Wall Street is calling it a foul but they don’t seem to care. China trade issues will take its own time to resolve so one can expect high volatility as we embark into the new year. There will be short term rallies but they will be sold and that’s why we suggested going defensive. S&P is already down more than 10% for the year but the jittery feeling of a October 1987 crash is looming large among Investors.
Bottomline, just like there is no ship that can never sink, there is no rally that can never die!. Happy holidays to all of you!
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