Market Direction and Stock Trends

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Jeffrey Saut: The call for this week

* April 24, 2017

Street smarts

This week Andrew and I are in Orlando at the Raymond James National Conference where we will be seeing portfolio managers, financial advisors, and giving a keynote address. Hopefully the equity markets will give an “upside address” of their own in our absence. To that point, it is worth mentioning that there has been an “internal correction” going on for the past few months, leaving only 25% of the S&P 500 stocks above their respective 10-day moving averages (DMAs). Meanwhile, 75% of the S&P 500 stocks reside above their 200-DMAs, which is evidence that the primary trend of the equity market is still “up.” Plainly, Dow Theory agrees with that! Amazingly, the equity markets have held up pretty well despite the talk of thermonuclear war and ICBMs, implying this has been a three-month bullish upside consolidation pattern. That is very much like the 18-month bullish consolidation chart pattern that occurred between November 2014 and July 2016, where the Bear Boos told us it was a major top, yet we remained steadfastly bullish. Ladies and gents, this is a secular bull market with years left to run. In addition to the stocks featured in our reports, the only sector that is “overbought” in the short-term is Consumer Discretionary (see chart 1 on page 3). And over the weekend Macron (the globalist) has a lead over Le Pen (the nationalist), leaving the preopening S&P 500 futures up some 26 points at 5:00 a.m. as we watch the sun rise in Orlando at the RJFS National Conference. As we said last week, “Ready your buy lists!”

https://www.raymondjames.com/wealth-management/market-commentary-and-insights/investment-strategy

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