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The call for this week
By: Jeffrey Saut | September 18, 2017

Back in June the three major indices traded out to new all-time highs, and we noted that every time those indices simultaneously trade to new all-time highs the SPX had an average 3.8% gain within the next three months nearly 100% of the time. Well, it is nearly three months later and the SPX is better by some 3.6%. Regrettably, we have underplayed that 3.6% rally because our models went into cautionary mode at the beginning of August. Most recently, our stock market internal energy model telegraphed there just is not a whole lot of upside energy available right here. Then too, the momentum indicator theorizes the odds of a trend reversal are high on a short-term basis, the breadth indicator is neutral (no trend reversal), and the sentiment indicator is flashing extreme complacency (high degree for a trend reversal). The catalyst for a potential near-term trend reversal could be the president’s address at the U.N. this week, where Ambassador Nikki Haley recently stated, “We’ve been kicking the can down the road, and we’re out of road!” All of this as Kim Jong-un bellows that North Korea is close to its goal of “equilibrium” in military force with the U.S.; and he might just try to demonstrate that coincident with the president’s U.N. address. This morning the preopening S&P 500 futures are up by about 4 points as investors believe the Federal Reserve will announce the trimming of its balance sheet and no North Korea provocations over the weekend.

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

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