So 2016 has not gotten off to a good start if you are long the market, as most people are. Here at Lanier Financial Group we are seeing a number of warning signs of things to come and want to clue you into our insights.

Here is a chart of the S&P 500 ETF (ticker: SPY) over the course of the last 5 years.

spy5

Now, here is a chart of the same SPY from 1/4/10 to 1/15/09:

spy5 09

These two charts tell us that if we retest the August 2015 lows and break through those levels we can, and more than likely will, see a swift liquidation of the markets sending the United States into another recession as we did in 2008.

Since 1994 the S&P 500 has had three bull market cycles (gaining value) and two bear cycles (losing value). The most recent bull market cycle is the longest of the three and if history has taught us anything it is that market downturns are often quick and violent compared to a typical bull market. This means that one must be positioned in a way to quickly remove themselves from harms way once the market begin to rollover, like it has over the last two months. Just to be clear, we are not making decisions strictly based on a quick chart comparison as we also see a number of global headwinds that will push this market lower such as: China currency devaluation as the US raises rates, oil losing two thirds of its value in 18 months, and overall global tension just to name a few.

Do you see or share our viewpoint of an upcoming recession for our economy and want to profit from it? We run a model portfolio based on this view. Complete the information below to learn more about how we are going to help you profit from a bear market.

 

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