From the desk of Steve Strazza @sstrazza
At the beginning of each week, we publish performance tables for a variety of different asset classes and categories along with commentary on each.
Looking at the past helps put the future into context. In this post, we review the absolute and relative trends at play and preview some of the things we’re watching to profit in the weeks and months ahead.
In last week’s report, we played “devil’s advocate” and laid out some of the more bearish developments we could find out there.
But all-in-all, the market is still providing bears less room to make a sound argument. We continue to find that any bearish evidence is primarily isolated to shorter timeframes… and even then, still overwhelmed by the abundance of bullish data points.
So while a minor rise in volatility can be expected in what tends to be a seasonally weak month of February, over a longer timeframe, we’re still aggressive buyers of stocks.
When we poured over our chartbooks this weekend, it became clear that there are eager hands for risk assets, as countless pullbacks were met with overwhelming demand.
Sentiment right now is also incredibly supportive of higher prices as investors are clearly still skeptical of this rally. This was illustrated well when the VIX was bid up to its highest level in history during just a 5% pullback at the end of last month.
This is all supportive of our case that a brand new bull market is just leaving the station.