After equity market strength through Thursday, Friday saw some weakness as earnings and growth fears once again resurfaced. The earnings season has thus far been unimpressive to weak, and the guidance has clearly been more negative than not.  I have been discussing for several months that an estimate revision cutting cycle was on the way, and it is now in motion.  Importantly, my work suggests we are still in the early innings and turning too bullish BEFORE my proprietary revisions work reaches max pessimism would be premature.  This is going to take some time to run its course.  The question is, will it be days, weeks, months, or quarters?  My analysis is still suggesting that days/weeks is too fast and that multiple quarters is likely to long.  Hence, I continue to target 3-5 months as the duration that looks the most likely, based on the history since 1990. 

So, my research remains skeptical of rallies while this downward ASM pressure continues, and I reiterate my warnings to investors to watch their overall risk levels, especially if one is sensitive to absolute drawdowns.  If one is a relative player or has an extended investment horizon, there are areas of the equity market and specific names that look relatively attractive. ...

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