I'd say it's generally the case that as we work our way through the latter stages of a given market cycle that many (if not most) folks either believe that (amid a bull market) stocks will deliver milk and honey as far as the eye can see, or (during a bear market) that market-armageddon is virtually upon us.
Now, it's safe/accurate to say that the seeds of every bull/bear market are forever sown during the preceding bear/bull market... The trick, in the case of bear markets, is seeing the tiny green shoots as they begin to appear, and determining whether indeed greener pastures are on the verge of emerging, or if odds favor a false spring this go-round.
As for our present view, suffice to say that, as I've been stressing herein and on the videos, while we're entering what has been the best growing season for equities, and, make no mistake, a lot of manure (very negative sentiment [fertilizer]) has been spread all over the market -- making us somewhat sanguine amid some crazy volatility of late -- our overall assessment of conditions says odds still favor at least a bit more pain before this one's in the books... Whether (assuming the bottom isn't indeed already in) it defies the season and occurs between here and New Year's Eve, or sometime thereafter, of course remains to be seen.
Now, regardless of whether there's ultimately more pain to come (our base case), or equity market spring is indeed upon us, we're not remotely arrogant enough to pretend that we'll be able to catch the bottom on the nose and perfectly time the shift into early bull-market mode with the requisite adjustments to our overall allocation... What we are certain of, however, is that there is indeed a market spring in the offing (precisely when, again, we don't know), and that the go-forward global macro setup will be utterly rife with value opportunities.
I.e., we like what we see (in terms of investable opportunities) beyond whatever's left to play out in the present -- still very precarious -- bear market... Clients, you'll begin noticing slow/subtle allocation shifts in the weeks/months to come (oh, and by the way, the high-frequency action you've noticed in your portfolios of late is almost entirely around the hedging... Present dynamics, options pricing, etc., has us remaining shorter-term and fairly close to the money).
As for this morning, stocks were buoyed in the premarket as the abrupt turn in UK fiscal policy has global markets rallying, at least early on... And, as I've been illustrating on recent videos, the technical setup isn't horrible right here.
With regard to the huge intraday swings of late, well, as we've been pointing out:
"...intraday trading in short-dated equity options has surged, creating temporary pockets of significant directional impetus that don’t necessarily reflect the underlying views of “investors.” --Bloomberg's Cameron Crise
Asian equities were mixed overnight, with 8 of the 16 markets we track closing higher.
Europe's up big so far this morning, with all but 1 of the bourses we follow trading notably in the green as I type.
US stocks are up big as well to start the session: Dow by 537 points (1.81%), SP500 up 2.22%, SP500 Equal Weight up 1.97%, Nasdaq 100 up 2.78%, Nasdaq Comp up 2.68%, Russell 2000 up 2.46%.
The VIX sits at 31.56, down 1.44%.
Oil futures are up 1.11%, gold's up 1.29%, silver's up 3.09%, copper futures are up 0.77% and the ag complex (DBA) is up 0.05%.
The 10-year treasury is up (yield down) and the dollar is down 0.71%
Among our 34 core positions (excluding options hedges, cash and short-term bond ETF), 33 -- led by Nokia, Sweden equities, Albemarle, base metals miners and Dutch Bros -- are in the green so far this morning. The only loser at the open is our base metals futures ETF.
"Acts of nature come in many forms, such as epidemic diseases, floods, and droughts. Throughout history they have affected the well-being of countries and the course of their evolution even more than wars and depressions."
--Dalio, Ray. Principles for Dealing with the Changing World Order: Why Nations Succeed and Fail
Have a great day!