by David Stockman
David Stockman’s Contra Corner
Yesterday’s spasm of machine rage begs a question. After the S&P 500 has chopped sideways for 600 days in no man’s land either side of 2060, and given the baleful headwinds now gathering from all points in the global economy, there is absolutely no reason to stay in the casino.
At Tuesday’s closing level there was, at best, a 2% upside back to the May 2015 high of 2130, and a momentary one at that. In the other direction stood the prospect of at least a 40% of downside to 1300 (15X current shrinking earnings of $87/share) when the third great central bank bubble of this century inexorably bursts.
Anyway, the likelihood was that the machines would take it all back at the first chance. That was today.