This is just a friendly reminder that the most bullish period of the entire 4-year cycle has just come to an end.
How’d you do?
Stocks broke records in terms of performance and have been in the midst of a raging bull market, driven by sector rotation and breadth expansion.
All of this is perfectly normal.
Stocks did very well at exactly the time that they were supposed to.
Not sure why so many are surprised by it.
Now that even the biggest permabears threw in the towel and started turning more optimistic, we are now entering the most bearish time for stocks:
Seasonal trends were just one of the many reasons why we’ve been so bullish for so long.
And now seasonals are one of the many reasons we expect a much different second half to the year compared to the first half.
See: Regime Change
Also check out our LIVE Conference Call this week for more details on how we’re approaching the market at this point and how it’s changed from earlier this year.
The biggest catalyst for stocks being under pressure, for me, is the strength in the US Dollar.
It’s hard for me to be too optimistic on the coming performance from the major indexes if the US Dollar Index is above the lows from the first half of the year:
From failed moves come very fast moves in the opposite direction.
That’s what we’ve seen here so far.
101.50 is a good number, in my opinion.
Until the Dollar falls below that, we are approaching the market much differently than we did during the first 13 months of this bull market.
How about you?
What are you doing differently? Or the same?
We love to hear from you!