The analyst provides a 20-year analysis, suggesting that after three consecutive years of double-digit returns, the fourth year tends to be negative. The S&P 500 currently trades at 23.5 times forward earnings, nearing dot-com bubble levels. He uses the 10-year Treasury minus 3-month Treasury yield curve as a reliable recession indicator and notes the dollar index’s critical support level since 2007, implying that the equity market has been trading in tandem with the USD. To mitigate risk, building a 10% cash position, hedging growth stocks with puts, and selecting non-index or defensive stocks.