2008 was an unprecedented year in many ways. After such a meltdown in equities
one intuitively expects a huge bounce if not even a bull market this year. Given
the historical oversold condition and the average depth/duration of a cyclical
bear market we in fact see equities setting a bear market low this year. However,
although we are rather bullish for Q1, we favor the ultimate bear market low to
materialize only in late Q3/early Q4, which is contrarian to the market consensus
and implies that 2009 will again be a quite volatile year where timing remains
critical to survive. Looking at the historically low basis and statistics, we
nonetheless anticipate this year coming out substantially better than 2008.
Reviewing 200 years of US stock market history suggests that after a down year of
15% and higher, there is a 70% likelihood of getting a positive year. Finally, on
the inter-market side we see 2009 starting two further macro trends, as we see
commodities and the bond market moving into an important bottom/top.
Here are our key calls for 2009 .

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