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We have just experienced the worst start of a new year in the equity markets, ever!

This is being dictated on January 22, 2016; the last two or three days have seen some modest recovery, but it does not auger well for traders. For investors, according to our sources (more on this later) things are not as bad as they look. Remember: by the time you read this, several weeks will have passed and things probably will change somewhat.

Our “sources” have to remain unidentified, but they are top level Wall Street. Here is their opinion as of January 15, 2016, on the state of the market and the broader world economy. China and the oil price slide are the primary causes for the investment market disruption, but this has been made worse by weaker than expected economic reports in the USA. This caused an 8% drop in the S&P 500 index, for the year.

The Federal Reserve, preparing for their next meeting January 26/27, has characterized US economic growth as modest, with mixed consumer spending, weak manufacturing, with an improving labor market and booming automobile sales. In the opinion of our advisors, until investors have more confidence that the Chinese government will be able to successfully manage their economy, and until oil prices stabilize, there will be continued volatility – just short ups and downs in the market that will make everybody nervous, with a downward overall trend The factor that caught most of the economists by surprise was the spreading effect of the drop in oil prices; as of this writing, oil which was around $100 a barrel a year ago is now selling for under $30.

Nobody believed this would cause the degree of disruption we are seeing. It turns out that the oil companies are indeed a big part of the world economy. They are canceling development projects over the world, are laying off thousands of people, and are the major cause of the indexes falling so far. The advice from our sources: if you are mainly in USA or E U strong bonds or equities, stay the course and coordinate the 4 PM closing bell with your first cocktail of the evening.