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Right now, it's all about the potential for greater inflation from higher oil prices and bond yields moving higher again. Higher bond yields and oil prices put inflation, valuations, and central bank moves back into focus.

That said, equities are still on solid ground at this point driven by the anchor of really solid earnings growth. We haven't seen this type of earnings growth in many years.

Since the mid-August highs, the S&P is down about 3%. September plus midterm elections could cause volatility to persist for a while. He'd be a proponent of using cash to take advantage of stocks that have dipped in the last little while. Take a look at high-quality names that are only down because the market's down.

Good news is that, historically, the 6-12 months after midterm elections tend to be one of the strongest periods ever on average. Hopefully that's the case once again. He thinks it'll be driven by earnings, continued capex expenditure, continued AI investment, as well as reshoring and nearshoring.

Historically, you see about a 15% drawdown in years where there's a midterm election. It doesn't mean you'll see that drawdown every single year there's a midterm election. It's just the average.

So far this year we've seen a 9% drawdown. But he could see that the combination of September seasonality with midterms would add a bit more volatility this month. Hard to say. We're down 3% since mid-August. If markets head 5% or even 10% lower, he'd use cash to buy equities.

Technical damage is there, with 200-day MA starting to trend lower and the price below that. Needs time to repair. Complicated structure and leverage makes it hard to value underlying assets. 

This ETF can make some sense at this point. Yield is ~4.25%, though relatively flat the last year. You'll be rewarded for picking up bonds at this stage, you can take a chance and extend duration. Yields have, perhaps, gone too far; if they pull back, then bond prices may start moving higher.

Yields have, perhaps, gone too far; if they pull back, then bond prices may start moving higher. This ETF has bonds of a shorter duration. Yield is a bit lower at 3.1%.

Invests in companies with high-quality features including low debt, reliable earnings. That might translate into less volatility. All US names, and 122 of them. S&P has outperformed this ETF over the past 1 and 3 years, but not by a tremendous margin.