Wednesday, October 25, 2017

This Week's Message: Breaking Records and Broken Records

Sorry folks, but as the stock market continues to break records we have become the proverbial broken record here on the blog. The long and the short of it is simply that for the moment this market remains a long (a buy), and anyone who dares to go short (sell), gets it handed to him/her.

Our assessment of present conditions -- which is all about the data -- has us remaining growthy in our sector weightings (industrials, materials, financials, tech). 

Here's Monday's look at some of the key market technicals we track:     click to enlarge...

And here's a look at the present macro setup (color coding denotes the present trend of each data point featured):     click to enlarge...

The above would not be the setup of a market, or an economy, ready to rollover into the next bear market, or recession. That looks more like the following (March 2008):     click to enlarge...

Of course none of this guarantees that the next bear market/recession is not indeed lurking around the next bend. It just speaks to the probabilities based on the weight of the evidence. As conditions begin to deteriorate, which they eventually will, we'll be singing a different tune here on the blog, and we'll be approaching our sector weightings within client portfolios accordingly. 

In the meantime, a little (or a lot) corrective action should be expected -- and it would be a healthy thing. That said, seasonality (year-end) definitely adds to the positive setup for the next couple of months. So, "the meantime" may not be in the cards until we get into 2018 (not a prediction mind you!).

Have a great weekend!

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