It’s fair to say this is one of the more hated stock market rallies. Why? Rarely have I seen so many caught on the wrong side of the trade. Sentiment is overwhelmingly negative. And yet the S&P 500 is up ~20% from its October low. This missive outlines both the bull and bear case. Either side can make valid arguments. This is what makes things so interesting. In short, you must have exposure to this market. However, you should do so with your eyes wide open.
"Market History"
Remain Wary of Permabears
Jeremy Grantham is a well known permabear. This week – he called for a possible 50% correction. Sure… it’s probable we see something in the realm of 20%… but 50%? I decided to look at Grantham’s track record against the S&P 500 over 25 years. Guess what – he has woefully underperformed the market. Hardly surprising. Beware of doomsday ‘crash callers’ like Grantham… and he is not alone. They are dangerous.
Patience
Traders (and investors) are wise to remain patient through this tightening Fed cycle. And whilst it is maturing… there’s still more to go. Here I take a look at recent recessions… and some lessons to draw from. Don’t be in any hurry here – we are likely to be headed lower
Market Poised to Rally… But Tread Carefully
Bear market bounce or market bottom? For me, it’s the former. Two things: (i) we still need to see earnings revisions come down; and (ii) the market has a large technical hurdle it’s yet to clear…
For a full list of posts from 2017…