I am amazed that the markets are rallying.  Wall Street earnings are at all time highs as a percentage of GDP.  The housing market is beginning to collapse.  Inflation is running above the Fed's comfort level.  Yet we're hitting new all time highs.

I personally think we're not in a good place. The Street is anticipating that the Fed will be cutting rates early next year.  If they do, it's a sign that the economy is slowing, which is not good for stock market returns.  If they raise rates, it means inflation is still running too high, which is not good for stock market returns either.

Add in where the yield curve is at and the picture is not looking so pretty.

We've finally hit into negative territory.  And the future doesn't look too promising.  As of yesterday's close, there's about a 27% percent chance of a recession.  That's more than double from the beginning of the year.  Even more frightening, is that if the 90-day trend were to follow the 15-day trend, we're headed towards a 33% chance of a recession, or almost 3 times as likely to enter into a recession than we were on January 1 of this year.  And it seems the market isn't paying attention.

I have personally bought puts on the Nasdaq and have purchased shares of QID, which is a leveraged short on the Nasdaq 100.  What are your thoughts?