While I'm going to attempt to hold out until the end of the year, I am resigning myself to imitating Warren Buffet (with his over-size cash position) afterwards, with the intention of picking up bargains after a dive.

I’m beginning to think that won’t happen, at least not in the way so many people are thinking. They’re is soooo much money on the sidelines waiting for the “dive” (“crash” “rout” etc) that some will rush in at the first sign of weakness, thereby giving it artificial support for a while. Buffett might be able to sit on cash for a while waiting for value, but lots of hot money can’t.

Rather than a “one and done” downward spike, I think we’re likely to see a step down rally, followed by nervous support, followed by another, then another, until a bottom is found. I don’t really expect that to be 50% down either, perhaps barely a bear (although valuations could stand to correct a lot more than that). I just think there’s too much money around. Money on the sidelines, dark money, unregistered money; it’s just sitting there waiting to pounce.

That’s exactly the opposite of what the “crash” people are predicting, indeed it could result in a melt-up if it gets out of hand (at least temporarily).