Last week's (late-week) rally was an easy call, as a pro-Brexit outcome to the UK election was a given, and because the stock market ramifications of allowing the scheduled tariff hike to occur this weekend were ominous.
This week's picking up right where last week left off, and while it makes sense that momentum, and seasonality, and under-performing fund managers (the vast majority) making their mad-dashes to the finish line, and, not to mention, short squeezes, can carry the rally to year-end, the boat is once again looking dangerously crowded on one side. Which generally means that the slightest catalyst will see the market turn on a dime, as the bulls all at once scramble to the other side of the boat.
Whether a catalyst occurs before year-end, when the calendar turns (hmm....), or further into next year, once again, the market's looking ripe. But worry not, for, if recent history repeats, the quick, unnerving dip will be met with a comment and/or a tweet from the top, followed by a swift rebound. All the while valuations stretch further beyond where the fundamentals would place them, making for an ultimately ugly ending to the longest bull market in history. Okay, so go ahead and worry...
Stay tuned, very shortly you'll be receiving our update of general conditions and a look at the new core allocation, and strategy, that we're rotating to.