All kidding aside, this stuff bears repeating!
From Last Week's Message:
"Bottom line, economic conditions (reflected particularly in the industrial sector) are waning, and as long as tariffs are the “tool” of choice in trade negotiations, that’ll be the trend; as they are unequivocally the problem."
Two weeks ago:
"The last three-day rally looks to me like nothing more than a relief bounce off of support, after a pretty steep uninterrupted decline. I just don’t see a sufficient short-term fundamental catalyst that’ll push stocks the mere 2% it would take to get them back to all-time highs. If indeed momentum took the market that far, without something substantial and sustainable on the trade front, any move to that level will I suspect be sold hard by short-term traders. Again, while anything can happen, I see low immediate-term odds of stocks even getting there, and I, therefore, expect a move below recent support over the next few trading sessions."
Three weeks ago:
"....while this week's 2+% declines in the S&P and the Dow, and 3+% decline in the Nasdaq, support my assessment, if you had told me that come Friday's close we'd be looking at a scenario that had tariffs ramped up on Chinese imports, and trade talks concluding with no followup on the calendar (although both sides dubbed this week "constructive" and vowed to continue negotiating), I'd have told you to look for a selloff easily doubling what actually occurred."
Four weeks ago: The subtitle of our May 3rd video weekly message was:
"Concerned (Near-Term) About Complacency"In that presentation, which happened to coincide with this year's top in the market (thus far), I pointed to several indicators that suggested traders were dangerously complacent at the time and, thus, a catalyst could exacerbate a market dip.
Five weeks ago:
"While my "mixed" characterization has me sounding a near-term cautious tune, as for macro conditions in the aggregate, they remain supportive of our present bias toward the cyclical sectors."
Six weeks ago:
"Some observations:
1. We've seen an epic run off of the 12/24 low; a consolidation of those gains right here makes sense.
2. The September '18 high actually looks more like a failed test of the August '18 high; a level that may very well serve as stiff resistance for a bit going forward (the S&P stopped dead in its tracks right there on Wednesday). Note my red circles on the graph (top panel) below: click to enlarge...
3. As regular readers know, my assessment of conditions has the present global trade environment as far and away the greatest hurdle between here and a sustainable move into all-time highs. Last week's report suggesting that the U.S. is urging China to rotate its retaliatory tariffs on $50 billion worth of ag products to other U.S. industries utterly smacks of political motives. I.e., does not inspire a sense that the powers-that-be are approaching this in a thoughtful, holistic manner that addresses the legitimate issues and aims to allay the palpable uncertainty that the present tariff regime is inflicting onto the business community (see yesterday's blog post #1 Corporate America Worry).
4. In the spirit of #3, recent negative rhetoric toward the world's largest trading block (the EU) no doubt has traders on edge as well.
Now, my short-term observations notwithstanding, among other bullish developments, a look at sector performance, volume trends and breadth suggests that a move well into new highs is likely just around the corner. Of course, a policy misstep, which (per #s 3 and 4) is a possibility that traders are intimately aware of, could see the short-term setup fall apart in very short order. We'll know soon enough...
Bottom line: We expect a notable pickup in volatility (in either, or both, directions) in the days/weeks to come. Which, as long as underlying conditions remain positive, will be volatility for the patient long-term investor (as opposed to the short-term trader) to simply ignore..."
Have a nice weekend!
Marty
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