Market Briefing For Monday, April 15

Probing new highs is 'taxing' for underinvested funds rationalizing not being in this market since last Fall's projected turnaround. Now the question is whether they chime in with or without meaningful setbacks. I can measure a continuation trend-line higher; and of course realize a lot who focus 'only' on history will (rightly) say such huge 'debt levels', at least ultimately, are not sustainable.  

Both can be valid 'if' the overall trend coming off our December lows persists ... overall ... allowing certainly for reasonable contractions within context of the overall uptrend. Too many are trying to 'force' markets to either continue higher, or suggest a debt-based collapse now, which is not realistic. And few recognize how suppressed business decisions in regard to multinational companies have been due to unknown factors, in terms of CapEx and planning, related to the tariff & trade disputes.  

If the China part (before EU) comes to successful conclusions, even if there' a temporary blow-off that retrenches; markets can rise later in a fashion that will frustrate both under-invested bulls and intransigent bears. Remember many small stocks have already corrected over the last couple months; so there is a degree of bifurcation already. Now if we don't get a deal with China (and Brexit is 'continued' via extension for now), one can contemplate the alternative; but again temporarily. 

  

The other side of the coin relates to 'serious' (often perma-bears) who expect collapse, riots in the street, and general upheaval in upcoming Election politics that they believe will be like no other in modern times. I don't see things that gloomy (though the arbitrary stances seen even in Congressional Hearings reveals how politicians continue assuming 'stances' based on agendas, rather than on making efforts to 'actually govern'; which rumor has it is what they were sent to Washington for).

So 'what if' those concerns were to come to pass (not now but as this evolves). Let's open an S&P 'fan' market view and you see last year's twin (crash-alert) highs; the projected S&P 2300-2400 Fall liquidation-wave lows; as well as our 'V-bottom' turnaround fought all the way up by so many hedgers; but now at new recover highs.  

Clearly it 'measures' to higher levels, but also reflects historic risks 'if' everything were to go awry. The bloated S&P size isn't a bubble-like or classic upside capitulation (that may be forthcoming; but not yet). It can build to levels of concern to the broader economy however. (That suggests that the equity sector is so heavy that if it does another 1999 scenario, which it is 'not' doing as of now then broader risks ensue.)

However, with the President's key focus on 'stocks', and big Election a lot of folks believe will determine whether a pro-business, pro-creation of capital; and progress that brings-in more participants, shall continue (so in that way the politics have more meaning for markets next year it seems, than they do for the moment).

  

In sum: a bullish perspective (aside reasonably due April-May pauses to refresh); still is that this overall advancing context persists past our transition year into 2020. It will take a 'China Deal'; maybe an EU deal; continued passive (they're really not dovish) Fed behavior; avoiding a geopolitical crisis of a significant nature; and Oil firm but not spiking.  

Beyond that you can imagine the S&P threat after one of the strongest (but not bubbly) S&P records for the start of a new year (Nasdaq just about ditto). So, should everything fall apart from any macro shock for which the Fed largely been disarmed, or the markets are blindsided; of course that's an issue.  

Nevertheless, with Trump keen on the markets, and even talking of a 3rd Summit with the North Korean dictator Kim (a possible concession in talks with China, because NK itself doesn't relate much to the trade issue for us anyway); that hinting at normally-detached influences (this being before an election year) that certainly has potential to keep key Averages staying at extended levels; or the 'bear at bay' with a logical pullback perhaps in the weeks just ahead.