'What occured on Wednesday was an unprecendented buying panic unlike anything I've ever seen before..'

'In short, being fully aware of where the market is in the context of the complete cycle, safety nets remain essential here, but we also expect the next few sessions to include a potentially steep “clearing rally” to relieve the compressed condition of the market. As always, our approach is to align ourselves with the market conditions we observe at each point in time. For now, we remain cyclically defensive, prepared for extreme short-term volatility in both directions, and open to that direction being higher, perhaps into year-end. We’ll take fresh evidence as it comes.'

- John P. Hussman, Ph.D., The Fast and the Furious, December 26, 2018



'What occured on Wednesday was an unprecendented buying panic unlike anything I've ever seen before. It didn't happen right out of the gate, stocks were shaky at the start but when the markets turned around early this morning, KABOOM, stocks exploded up as did oil which gained nearly 10% today despite the strong US dollar..

So why did stocks melt up today? To understand this, you should begin by reading my last comment on the bad Santa selloff of 2018 which I posted on Friday. Read that comment very carefully to understand what was going on prior to this melt-up in stocks.

..

..exchanges .. thrive on volume, it doesn't matter whether stocks are going up or down as long as volume is there, exchanges are making a mint. It's the same reason why they embraced computerized trading, it's all about volume and profits.

..

..nearing our first major bear market bottom.

..

Still, I caution you, we are likely entering a bear market when the next major selloff occurs, and you need to understand that we will see many countertrend rallies -- some more explosive than others -- but that's all they are countertrend rallies that eventually peter out as stocks head lower.

I need to warn everyone reading this because it's easy to get caught up in the excitement or fear that grips markets during these big rallies and selloffs.'

- Leo Kolivakis, Making Stocks Great Again?!? December 26, 2018



Context

Q3 2018, THE Cycle Peak