It is a New Battlefield; Adjust Accordingly

The team with the longest winning streak in New Jersey high school football currently (33 games and counting) is Caldwell High School, a program with which I am quite familiar. The Chiefs, located in West Caldwell, have been a powerhouse for a school of their size--especially a public one--for many, many decades, with several state championships and countless overall wins. 

Known for their tough kids but especially their astute coaches, they always seem to make the proper adjustments in-game, even in-season, particularly when they do not initially look so formidable. As a sophomore in high school starting on varsity for a competing school, I remember how over-the-top surreal it was when we played them. They were ranked in the top ten teams in the state, back in 1995.

We went up 14-0 on them well into the third quarter, and we all were playing great. Everyone on my team was flying around and in the zone. Of course, as green as I was then, I recall thinking how we could easily blow them out and run up the score to embarrass them. 

As fate would have it, their legendary coach (since retired, with one of the former players who might be an even better coach now at the helm) made some sneaky adjustments: He had his all-state left tackle widen his "split," or stance line-up, by about an extra foot to widen the running lanes, and did not abandon the running game like most coaches would have in that spot.

They ran the ball effectively, clawed back into the game, shifting the pressure to us. We buckled under that pressure, and the next thing I knew they won 21-14 and were doing the Caldwell Chief "chop" chant at the end of the game for one of the worst possible feelings I experienced in sports. 

Why do I bring all of this up?

Because you have to continually make adjustments and you can never panic--That is the essence of mental and emotional toughness. Even when you look terrible at first. Even when everyone writes you off as a bum. 

The new market regime we continue to operate in is in the early stages. Gone are the days of QE/ZIRP. And despite how many bold calls there are for their imminent return, it will not happen without a crash first--Yes, a bonafide crash. 

Until then, rates are still sticky high. And so is the Dollar for that matter. As many calls there are for an end of year rally should only given more pause to that scenario, especially in light of this morning's action. 

What happens, perchance, if we gap down below 4200 on the S&P tomorrow after the jobs report?

Have you any idea how many longs would be trapped then, those who complacently assumed a year-end rally? I doubt they do, because thinking about those scenarios and needing to adjust is not something they have needed to do for a good while now.