Ok, let me ask it this way: are there any times you can think of, where the stock market rallied during or just before, a period of falling earnings. A rally could occur during declining earnings based on perhaps the Fed lowering, oil prices falling, a Mideast conflict easing.
I believe earnings will keep falling into next year, until the imbalances in our economy are worked out. Consumer debt must stabilize, and consumers have to either save or get the ability to take on new debt. Until then, the economy will keep slowing. However, if the Fed cuts interest rates in the fall, and we can have a rally. How that rally could sustain for 2 years is beyond me though.
I am looking to get into stocks next year, when earnings are very low, the builders/retailers/banks are hammered due to bankruptcies and foreclosures, and nobody wants to own stocks. That’s when I would get back in.
Your mid-year election cycle plan has historical precedent, but runs counter to what is in the pipeline for the economy. So it requires the stock market to rally in the face of declining earnings.
