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>>> The call for this week <<<
By: Jeffrey Saut | October 15, 2018

It is unbelievable to us that investors are listening to pundits that NEVER saw the decline coming, yet now want to tell us why the decline happened. Ladies and gentlemen, the important thing to know is that a decline was coming and Andrew and I said so two weeks ago before the decline began. Andrew did an excellent job of calling the bottom late last week and we will see this week if that call was correct. We will say, our breadth model triggered a “buy signal” last week, the CBOE Put/Call ratio – a contrary indicator showing participants have become too bearish in the near term with way too many “puts” being purchased than “calls” – and the steepening “real” yield curve is suggestive of positive economic growth going forward. Capital expenditures have picked up and earnings remain strong, all of which imply the S&P 500 (SPX/2767.13) should be above 3000 by year end. We are unconcerned with “probabilities” that stocks will trade at X-times this or that projected earnings estimate since all that is important is the primary trend of the equity markets; and, the primary trend remains UP. As we write, preopening S&P 500 futures are off 13 points on higher oil prices, which are due to U.S.-Saudi threats and the comment from the ambassador to the U.S. that China doesn’t want a trade war but will respond to U.S. actions. Barring news or developments, traders will buy the probable early decline because they are bullish for the Monday and expiry rallies.

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