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Exodus 8:2

We may be through with the past, but the past isn't through with us.

I'm a big fan of history, and although I'm not a trained historian, I wrote a book about history through the lens of financial markets called Panic, Prosperity, and Progress (which has 22 reviews on Amazon, averaging 4.9 out of 5 stars...........so it can't be that terrible). As part of this, I enjoy thinking of the arcs of history, particularly financial history, and anticipating where we might be going. This post is just such an exercise.

I will say at the outset it is hazardous to get too caught up in narratives. The one offered by our friends in Gainesville in 2009 was along the lines of "the market will fight its way back to about 950 on the S&P 500........1,000 at the most.......and then begin its final descent to its low of 400." I don't have to tell you things didn't pan out quite that way. However, my musings here aren't based on Elliott Wave, indicators, or anything except my own vague projections about where we are heading financially and politically.

I think between now and the end of next year, we're going to see something along these lines:

Beat the Crash: sometime before the end of October, we're going to take out the so-called "crash" lows of August 24th. How low this is remains to be seen, although I'll be satisfied if it's even modestly lower. I did this post on the 20th of this month projecting what these lows might be, and most folks thought I wasn't being bearish enough. They may be right. In fact, as I'm sitting here right now looking at that post, it would make a lot more sense to have a serious breach of the August 24 lows, considering the "next step" I'm going to lay out. Let's just agree that the drop would be serious enough to become persistent headline news and, dare I say it, cause Gartman to declare an all-out bear market.

Yellen's Last Hurrah: at this point, Janet "the antichrist" Yellen will have license to do Whatever The Hell She Wants to "fix" things. This will be her last free pass to do so. None of us can know what form this salvation will take (negative interest rates? QE4? the threat of a nude Yellen sex tape unless the market rallies?) but, whatever the form, it will, in fact, cause the markets to rally more strongly and firmly then they did between the August 24 crash and the September 17 FOMC top.

The Stall: while it will seem that Yellen's latest gambit has worked (but we know better, right?) the equity markets will cease their ascent. My guess is that this stall will be at the approximate price levels of the August 24 lows. Let me say that again: even after another ridiculous government program, I think the best equity prices are going to muster are going to be not much different than the "panic lows" of August 24th. Once equity prices stop obeying Yellen's desire for them to go higher, people are going to start to worry. And then........

All Holy Hell Breaks Loose (during a big election year, no less): this is where the real fun begins. What's particularly interesting about this phase is that it will be right in the thick of the U.S. Presidential Election Cycle which should make things, errr, interesting.

A Surprising Choice: November 8th, 2016 is the big day, and I put it to you that the person elected president is going to be a surprise (at least to those speculating about it right now). The tumult of 2016 is going to compel people to want, yet again, "change", and that could come in the form of Bernie Sanders (in case the nation's mood wants to punish the rich) or Donald Trump (in case the nation's mood instead actually buys the notion he can make the country "great" again). It won't be boring-as-milquetoast Joe Biden or the-only-thing-special-is-that-she-lacks-a-penis Hillary Clinton. The status quo is going to be very "out" in the world of political fashion.

So there we have it: my wild-ass guess for the next 14 months. Let's see how it goes.