Speaking of timing indicators...

Stock market valuations are notoriously terrible for giving any insight into the likely next direction of markets. But terrible isn't exactly zero.

Maybe you think there will be a US recession in the next year or so. Is that priced in?

An article in the FT notes the following reasoning--

In the five US recessions since 1980, on average stock market valuations have gone from 16 to 11 times forward earnings, always ending no higher than 14x.

Currently the market is sitting at around 18x, and earnings estimates have not yet really begun to fall because it takes time for economic developments to affect numerical estimates. Mr Dimon suggests that a 5% drop should be expected. Apply that to forward estimates, and assume an ending level of 11 times (revised) forward earnings, and you get the expectation of a drop of another 40% from here.

That is not my forecast, but I am trying to be entirely prepared for it. I recently bought some disaster puts against small caps, as they usually take a beating. Not a lifestyle-affecting position, but if things hit the fan it's always nice to have something green on the screen to cheer you up. And some profits you can realize to buy something good that has gone irrationally on sale.

Jim