Return to Normalcy

Dear Family, Friends and Clients,

Yes, stocks fell 3+% on Tuesday and the market is closed today, Wednesday. Pre-market indicators are positive and it appears stocks will open sharply higher on Thursday morning.

The bull market uptrend is still intact, with the market only erasing the + 850 points we gained from November 28th. Four business days ago the market was in exactly the same place.

Profits and the economy are still growing. This is not the end, no matter how many negative forecasts you hear. Corporate balance sheets are strong. So are consumer balance sheets. Banks are over-capitalized.

There are no major bubbles, except, possibly in long term 30 year Treasury bonds.

2008 was a once in a generation panic, just like the "Nifty Fifty" of the 1970's, the stock market Crash of 1987, the Great Recession of 2007-2009; and is likely not going to happen any time soon.

For now, the market is "middling", so there is no need to raise the yellow alert, or raise additional cash until we break through 2,500 in the S&P 500.

"Fun Fact"

Of the 70 or so identifiable asset classes, about 90% are negative in 2018. Apparently, this hasn't happened since 1920!

I believe we're seeing a "return to normalcy", and expect to see this trend continue as we come off the "hangover" of a liquidity pumped, Federal Reserve and Central Bank orgy the world has ever seen. Normal is good. We've just gotten used to abnormal over the last 9 years!

Don't confuse short term volatility with risk. Don't confuse the economy with the stock market.

We're spending a portion of this week in educational training and will have much more to report when we return.

Respectfully submitted,

Bill

Respectfully submitted,

Bill Ulivieri

Cenacle Capital Management is a State of Illinois registered investment advisor. IARD 130804

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