Thank goodness for small mercies.

Going into the New Year with 100% cash was the best decision I made in 2015. It is allowing me to use the current melt down to cherry pick the best trades out there.

Shorting the Volatility Index (VIX) at $25 through the (XIV)? Thank you very much.

Nothing marks the bottom in a move better than bringing my old buddy, Marc Faber, on TV, when the Dow Average is down $400. Marc hasn’t had a bullish day in his life. His newsletter is entitled “Gloom, Boom, and Doom” for a reason.

Who is next? Mr. Dow $3,000, Harry S. Dent, Jr?

These gurus are predicting that we are in a new bear market, that the average stock will be down 20%-40%, and that the worst is yet to come. Don your hardhat, man the lifeboats, and run up the white flag!

Let me tell you why my friends are wrong.

To get a bear market, you need a recession. There ain’t no recession anywhere on the horizon. US GDP is set to grow at a modest 2% plus this year, not the negative numbers you need to signal the end of this bull market.

In fact, things are about to get a whole lot better.

You know that $1 trillion de factor global tax cut in the form of cheaper energy? It just became a $2 trillion tax cut, thanks to the collapse in prices that we saw in December.

That other great subsidy, free money delivered by the Federal reserve in the form of ultra low interest rates, looks to continue far longer than any imagined, except for me and Janet Yellen.

This means that the causes of every recession since 1945, energy and interest rate spikes, are absolutely nowhere to be seen.

And while the dollar was a big drag on US multinational earnings in 2015, this year I expect little movement. That's because currencies need interest rate changes to move. No, change, no movement.

If we are, in fact, in a ”one and done” world, there will be very little action in the foreign exchange market this year.

All of these positives will conspire to drive American corporate profits to new all time highs this year, probably to $130 a share for the S&P 500, or up about 10%.

Granted, we are certainly in no rose garden, and the global economy is facing some challenges.

In my book, the biggest concern is the $4 trillion in new debt piled up by companies in emerging nations over the past decade. The strong dollar has effectively doubled their interest and principal payments. But save for a few banks, that is their problem, not ours.

While the market is not cheap at a 17 times price earnings multiple, it is not expensive either. This historic range for this measure of share value is 9-22. I warned you that rising interest rates, however modest, could only translate into falling multiples, a point by my calculation.

Who knew this discount would entirely kick in during the first three days of January?

So what’s the big deal here? Why are traders and investors using the New Year’s tiding to throw up on their shoes? Did they drink the wrong Champagne?

Don’t tell me it’s all about China. The bourses there never really were stock markets in the conventional sense. They are really places where the government attempts to exercise its control of their economy. As a 45 year China veteran, I have always known this. The rest of you have known it since the summer.

And these are tiny markets, accounting for no more than a couple of percent of global market capitalization. What is the foreign ownership there ? A scant 2%, held by a handful of exchange traded funds and errant hedge funds.

Remember, the Chinese didn’t want to let us join their club while prices were rising. Now that they are falling, we don’t want to join.

So was it North Korea that caused the big dump? Fat chance. It is likely that what was actually detonated was a primitive nuclear weapon, more the product of a high school chemistry class, and not the H-bomb that was advertised. It really had more to do with the Great Leader’s birthday.

The Hermit Kingdom is so poor that it will take them another five years to build another one. Take this from someone who used to build nuclear weapons for a living.

I worked at the Nuclear test Site in Nevada before my math skills took me to Wall Street, where “yield” had an entirely different meaning.

So is ISIS and the turmoil in the Middle East causing the sell off? Nope. The threat to the US posed by this criminal organization has been wildly exaggerated because this is a presidential election year.

I tend not to worry too much about military problems that can disappear with the push of a button, or the jiggle of a joystick in Nevada.

In any case, US bear markets are prompted only by domestic developments, not foreign ones, and there is definitely none of this currently at play at home.

So why are people selling? It is really all about psychology.

After nearly seven years, the fourth longest bull market in history is getting tired. Aged bull markets act differently than new ones. As conviction fades, they become choppier, with lower returns and higher volatility.

But they still go up.

I spoke with nearly a dozen managers of $1 billion plus hedge funds today, and nearly everyone has the same attitude. Go in light on risk during the first half of the year, and then pile it on in the second half.

That gives time for foreign quantitative easing to work, the global economy to recover, even for China, energy and commodities to bounce, and for the outcome of the US presidential election to become a forgone conclusion (as it already is for me).

That means this is no more than the 15% correction I predicted last week, of which we are already two thirds of the way through. That puts the final bottom for the S&P 500 at 1,800, but it may take months to get there.

In other words, don’t get too short here, lest a ferocious short covering rally rip your face off.

So as much as traders are distressed, I am very relaxed.

I think I’ll go watch the new film The Big Short, based on my friend, Michael Lewis’s book.