Sentiment & Seasonality

JC Parets
February 3, 2022

You guys know me by now. I'm not exactly "Mr. Seasonality" where we follow seasonal trends tick for tick.

That's not how markets work.

BUT, I do think it's important to put things into context. In fact, 2021 followed seasonal trends better than any year in recent memory.

Take a look at last year's tracking of our Cycle Composite. That was right on point wasn't it?

We're taking every year going back to 1950, All Post-Election Years since 1950 and every first year of the Decennial Cycle going back to 1950 to create our composite.

Look how closely it tracked that.

Will 2022 be similar?

In this case we're looking at all the years since 1950 once again, but this time we're including the Mid-term years and all the 2nd years of the Decennial Cycle.

Currently that trend is up for stocks before we hit Q2 & Q3 which is historically the worst period of the entire 4-year cycle. That's still a few a months away though.

For now, can we check in on Sentiment? We're seeing the fewest amount of bulls since 2016.

Are you kidding me? We have fewer bulls today than we had during COVID?

Am I living in the Twilight Zone?

Here we're taking the average bulls from both Financial Advisors and Individual Investors.

We have the fewest bulls since 2016.

It's pretty crazy when you think about it.

So we have a seasonal tailwind. We have sentiment at its most pessimistic levels in half a decade. And the US Dollar is potentially rolling over here.

Are we buying stocks?

Yes we are.

Premium Members, make sure to give Tuesday night's video a good watch. There's a lot in here that we need to make sure we know as we move into February.

- JC

 

 

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