Looks like a 2022/2023 year coming, was hoping for a 2018/2019 year Now that we have 3 full months of data I have to start thinking instead of Trump repeating his first Midterm (price action was looking more like 2018) it's actually more likely we get a Biden type of midterm (double digit drawdown and slower bleed). The reason I've flipped back and forth every month or sometimes even weeks is because per usual we see price action that causes you to deviate one way and then events happen to pull you in another direction. Inflation was cooling, then back up. The fed was close to cutting then now probably not. Unemployment was going down now flirting back up. GDP was expanding, but now contracting. The past decade we've only had 2 red years, both midterms It's almost more annoying when history keeps repeating itself because you feel like no way with different conditions it can keep playing out. I've learned early on to not fade the Midterm Rally but what's been more difficult is trying to play the year before. The wild April Tariff "crash" would have made perfect sense in a Midterm year, pretty unusual for Year 1. So seeing that flip sentiment and seeing us V shape reverse out of that it felt like getting a 2018/2019 midterm year made more sense (a slow grind up that retraces and the S&P 500 finishes down only 4%) Why is 2022/2023 more similar? I mean in my mind Trump was president in 2018, so I assumed since he's president again he probably has similar behavior and gets similar market reactions. However, politics aside, the markets, global conflict, all that now seems to be right back to where we were in 2022/2023 back with fears of recession while having a global conflict. Russia Ukraine War versus Iran Conflict (Different yes, but the point being there's a conflict) We now have less than ideal economic data and odds of a recession have gone up (similar) Midterm Year for both, and historically mid term years are red (not always) Since it's the last few years for both presidents it's implied new change is coming which is also similar Oddly enough we are back to similar gas prices again, another similarity So until data or events happen to change the current thesis (it's important to be flexible) this is more how I plan on playing the year (see chart) We'll still get bounces, we'll still have plays that have upside, but we might add in some more shorts and hedges than originally planned. Long term holds don't really change, there will be new narratives and trends that still have their own bull markets, and just because this is what I expect there's still a chance it doesn't happen.
