Years ago, the great Sir John Templeton said, “The secret of my success is that I buy when everyone is selling, and I sell when everyone is buying.”

Let’s consider the optimism that exists everywhere at the moment.

Today, optimism on the U.S. equity markets has rarely, if ever, been this bullish. Two words: “All in!”

Valuations are extremely high. Forward coming returns are likely flat to negative over the coming years.

If there was ever a Sir John “sell when everyone is buying” moment, it’s now. If there was ever a time to hedge, it’s now. Down 50% to 60% remains a real risk. We may go higher… the Fed may decide to step in and buy equities. Don’t know. That’s the bet. Stay on your toes and keep top of mind that faith was bestowed on both Greenspan and Bernanke also, and that bullish Fed narrative lasted until confidence was lost.

All bubbles eventually pop.

#1 - Where am I going ?

Supreme Court Justice Joseph Blazevic had the reputation of being absent minded. One day on the bus out of Novaki to Karlovac, Joseph was studying a pending case when the conductor asked for his ticket. The jurist searched each pocket nervously, but to no avail.

"Don't be concerned, Mr. Justice Blazevic," the conductor said. "We know who you are. When you return to Novaki, you can send us a ticket at your convenience."

Joseph lowered his eyes and shook his head sadly. "Thank you, my good man, but you don't seem to understand the problem. It's not a question of weather I'll pay the fare. The problem is: Where am I going ?

" I want to thank me " and I wish you do the same for yourself. Healthy, happy and prosperous 2021 !

 I want to thank me.

I want to thank me for believing in me.

I want to thank me for doing this all hard work.

I want to thank me for having no days-off.

I want to thank me for for never quit.

I want to thank me for always being a giver and trying to give more than I receive.

I want to thank me for trying to do more right than wrong.

I want to thank me for just being me at all times.

In summary, it looks like things are going to be very interesting in the new year. For now, it is necessary to remain bullish, but alert.

The market is strong, as evidenced by new all-time highs in all four major indices this past week. Since price action is the most important indicator, the overall trend remains bullish as long as SP-500 holds above support.

There is a short-term support at 3725. Below that, there are two important support areas, the first is at 3630-3650, and the second is at 3550.

So, what could possibly go wrong? Well, there are plenty of sell signals that could be setting up.

"Trust your gut."

Don’t do what you know on a gut level to be the wrong thing to do. Don’t stay when you know you should go or go when you know you should stay. Don’t fight when you should hold steady or hold steady when you should fight. Don’t focus on the short-term fun instead of the long-term fall out. Don’t surrender all your joy for an idea you used to have about yourself that isn’t true anymore. Don’t seek joy at all costs.

I know it’s hard to know what to do when you have a conflicting set of emotions and desires, but it’s not as hard as we pretend it is. Saying it’s hard is ultimately a justification to do whatever seems like the easiest thing to do—have the affair, stay at that horrible job, end a friendship over a slight, keep loving someone who treats you terribly. I don’t think there’s a single dumbass thing I’ve done in my adult life that I didn’t know was a dumbass thing to do while I was doing it. Even when I justified it to myself—as I did every damn time—the truest part of me knew I was doing the wrong thing. Always.

As the years pass, I’m learning how to better trust my gut and not do the wrong thing, but every so often I get a harsh reminder that I’ve still got work to do.