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So many moving parts for the end of 2012: China's economic acceleration (maybe), Europe's economic deceleration and continuing debt crisis (certainly) and the U.S. "fiscal cliff" and stubbornly slow economic recovery.

Each by itself could change the direction of the financial markets.

In combination they could cancel each other out or multiply their individual powers.

I think we're likely to see lots of volatility -- much of it to the downside. Days that have the smell of investor panic -- like Wednesday, when nine stocks fell for every one that rose on the New York Stock Exchange. And we'll see swings from endless worry (like now) to unjustified optimism (give it two weeks).

Let me share a strategy for navigating your way through this maelstrom, and a crisis-by-crisis timeline.

Ready to move

The strategy (or maybe strategies) I'm trying to follow in this period is one I've advocated before as a way to deal with the extraordinary volatility that comes with the market these days. It builds on the idea of opportunity costs. And it involves selling stocks that look as if they're going to need more than six months to see their upside.

Jim Jubak

Jim Jubak

I may like these stocks for the long run, but the opportunity cost of sitting in dead money is too high. That's because I'd like to have some cash so that if a great stock I've had my eye on for months (or years) suddenly gets cheap, I'll be able to buy it. During this period, I'd like to raise my cash for those opportunities not by selling my strongest stocks -- that's always a temptation during periods of volatility, when the strongest stocks are the only ones you can sell without a big loss -- but by selling those where the potential payoff is furthest away.

What stocks do I want to buy? Those few that never seem to go down, except when the market is really, really in a downtrend. (Take a look at a chart of Middleby (MIDD) since August to see what I mean.) Stocks that have been knocked down so far in a selling swing that they're now bargains on even near-term prospects. Stocks that could break big to the upside in early 2013 if -- as I think likely -- growth in China and in the United States turns out to be not exactly strong, but stronger than expected.

Yes, those are ideas that I've recommended before (along with the idea of buying dividend stocks if volatility knocks down the price enough to produce a 5% yield). And they've worked in other periods of volatility this year. Wash, rinse, spin, repeat.

In this column, I'm going to lay out my best guess at timetables for the three big macroeconomic, market-moving events -- and suggest how they might fit together. The goal is to give you a road map to the news that will drive market emotions. And then I'll give specific examples to give you an idea of what to pursue and what to shed during this end-of-the year mayhem.

Let's begin with what I call my "timeline to disaster."

You can start with any event you chose. Me? I like to start with Europe.

The Europe muddle

At the Nov. 12 meeting of European finance ministers, Greece didn't get the 31.5 billion euros ($40.3 billion U.S.) it needs to keep the lights on and the banks open after the first week of December. The finance ministers will meet to try again on Nov. 20.

What's likely? Greece will muddle through until then, and at that meeting Greece will get its funding. But the International Monetary Fund on the one side and the European Central Bank and the European Commission on the other will not bridge their differences about extending the deadline for Greece to reduce its debt-to-gross-domestic-product ratio to a sustainable level. That will get put off until the December meeting.

I don't have much hope for a December agreement. There's just too much baggage here; to get to a sustainable level of debt, the ECB would have to agree to write down the value of the Greek bonds it now holds. To put any formal extension into place -- to agree on what happens after Greece gets its 31.5 billion euros -- eurozone governments would have to go back to their electorates and explain why they need more euros to fund Greece with no prospect for this move marking the end of the crisis.

I think we're looking at the endgame in the Greek crisis, but no one wants to admit they're playing. The result will be one more payment to Greece -- another kick of the can down the road -- in December, and then sometime in 2013, the beginning of serious talks about letting Greece exit the eurozone while keeping it in the European economic community.

My call on a euro debt crisis timeline: Worries that Greece will have to shut its doors and that Europe won't act will keep the market on edge through a deal (totally inadequate as it might be) at the end of November. Then elation at a deal (any deal) in December, and then in the early part of 2013, the return of fear as the deal is seen as inadequate.

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