PREPARING FOR ANOTHER CRISIS? As outlined in detail on November 17, when market participants see really unfavorable economic and market outcomes, they anticipate future Fed rate cuts and begin migrating to defensive long-term Treasury bonds. Since the S&P 500 hit the first 2018 peak on January 26, market participants have had almost an entire calendar year to review present day fundamentals. Are they migrating to defensive Treasuries in a similar manner to the migration in 2007/early-2008? The answer is no. The chart below shows the long-term trend in the growth-oriented tech (RYT) vs. defensive-oriented bonds (TLT) ratio clearly rolling over in 2007 (below left); the same trend looks much stronger and sustainable today. Are there concerns in 2018? Yes, both fundamental and technical. The charts above simply help us assess the magnitude of the concerns today relative to the magnitude of the concerns in early 2008. It has been ugly in recent weeks in 2018, but not nearly as bad as the peaking process in 2007. https://www.ccmmarketmodel.com/short-takes/2018/11/26/fundamental-concerns-2008-vs-2018