Brief Holiday Update

John P. Hussman, Ph.D.
All rights reserved and actively enforced.
Reprint Policy

The Market Climate in stocks last week continued to fall into a classification that has often been associated with a "whipsaw trap," though as usual, we are aware that about 30% of these instances have gone on to achieve some amount of extended gains, so we continue to monitor the evidence - particularly market internals and sentiment - closely here. As I noted last week, there is a typical "sentiment cycle" in economic surprises, which we would expect to roll over to an increasing number of economic disappointments in the weeks ahead, but we'll respond to the data as it emerges. Given that we're in a typically low-volume, slightly positive seasonal period, I expect that day-to-day movements over the next several sessions may be more influenced by those factors than by meaningful economic or international developments, but we remain defensive in Strategic Growth and Strategic International at present in any event. No change in our bond or precious metals positions in Strategic Total Return, though we did use last week's unusual strength in utilities as a point to clip our utility position in Strategic Total Return to less than 1% of assets, as utilities often do not escape having a beta in unfavorable stock market climates, which we still observe here.

---

The foregoing comments represent the general investment analysis and economic views of the Advisor, and are provided solely for the purpose of information, instruction and discourse.

Prospectuses for the Hussman Strategic Growth Fund, the Hussman Strategic Total Return Fund, the Hussman Strategic International Fund, and the Hussman Strategic Dividend Value Fund, as well as Fund reports and other information, are available by clicking "The Funds" menu button from any page of this website.

Estimates of prospective return and risk for equities, bonds, and other financial markets are forward-looking statements based the analysis and reasonable beliefs of Hussman Strategic Advisors. They are not a guarantee of future performance, and are not indicative of the prospective returns of any of the Hussman Funds. Actual returns may differ substantially from the estimates provided. Estimates of prospective long-term returns for the S&P 500 reflect our standard valuation methodology, focusing on the relationship between current market prices and earnings, dividends and other fundamentals, adjusted for variability over the economic cycle (see for example Investment, Speculation, Valuation, and Tinker Bell, The Likely Range of Market Returns in the Coming Decade and Valuing the S&P 500 Using Forward Operating Earnings ).