Welcome to the Year-End Rally

JC Parets
October 10, 2023

Are you ready for the end of the year squeeze?

Many investors think it's not coming and that the market is going to crash instead.

In fact, CTAs have never been this short. The last few times they were anywhere near this bearish, stocks went on to have some of the greatest rallies in history. I remember them well:

Think about it like this.

After the Nasdaq had the best first 6 months to a year IN HISTORY, many stocks have seen a perfectly normal seasonal correction, that tends to happen regularly in the 3rd quarter, particularly in pre-election years.

How quickly the permabears forget how painful the first 6 months were for them. They're already back, pounding their chests, scaring anyone who will listen, just before the most bullish period of the cycle:

"Buy in October and get yourself Sober", is how I learned it from my pal Jeff Hirsch.

That November - January period is really when stocks tend to get going.

But the trend is already up. Let's not forget...

Looking at just the NYSE, I count 964 stocks that are up over 10% this year. 561 stocks that are up over 20% this year. 148 stocks are up 50% this year. And 35 stocks doubled. Where are people getting that it's only 7 stocks that are going up?

Besides, look at the equally-weighted Tech Index making new all-time highs relative to the equally-weighted S&P500.

This is called leadership.

And finally, what's the catalyst?

What's going to get stocks going again, resuming this bull market that began in summer 2022?

It was always the Dollar. That has always been the catalyst.

More recently, the new 52-week highs list peaked in July on the exact day that the US Dollar bottomed.

So what's it going to take to get stocks going again?

A weaker Dollar, just like last Fall:

If you start to see the US Dollar Index back below 105-105.50 or so, back below the early 2023 highs, and your short squeeze in stocks is on.

I don't want to over-simplify things. I just generally believe it is, in fact, that simple.

Let me know what you think.

Meet me in Chicago tomorrow night and we'll talk about it.

Charts in Chicago

I'll be in the Windy City tomorrow, October 11, where I'll be giving a LIVE presentation at the Chicago Board of Trade.

Bring your clients and colleagues, and let's talk current market conditions and what we're doing about it.

More importantly, we'll get some cocktails afterwards as well.

Click here for complete details and FREE registration information.

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