This is the 3rd time in the past 3 weeks (Sept 26, Sept 30) that I’m writing about contrarian signals being flashed left & right - especially for US equities:

• VIX hit an intraday high of 46.5
• 3-month T-bill yield back to 0.5%
• S&P down 30% from the October ‘07 peak & 22% since May (we got more to go, but don’t forget the ‘fast & furious’ bear market rallies)
• News flow (and sentiment) is extremely negative
• T2108 at July bottom levels
• All sorts of historical data w.r.t. Q4, election years, October bottoms, etc. point to a 15%+ upmove
• Cycle low in (or coming soon)
• Dollar strength, gold weakness, EU mess, ultra-low T-bill yields - at some point, US equities have gotta look attractive
• Hedge funds being forced to sell to meet redemptions, margin calls and what not - at some point, selling will be exhausted - hopefully soon

And finally, the front cover of the latest edition of the Economist:

This is like being a broken clock - it’s right once in a while. Meanwhile, I continue to ‘average down’ using Vanguard index funds.

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