E Market Briefing For Monday, Dec. 23

Trees don't grow to the sky  forever; and we've address that. But the S&P this year is no average tree; it's more like Rockefeller Center's. Of course it took more lights that usual to trim 'that tree' and at some point you place the final ornament on-top of the tree; capping decorations.  

So it is with the S&P; at some point the tree ascends sort of like a tree's 'angle of attack' steepens (no allusion to the 737 Max intended). And it gets to a peak before .. well... the decorations have to stall as there's a minimal amount left to complete.  

The trick this year has been to recognize that the big-cap leadership (a veritable handful of stocks) were leading the market; while the elves that were needed to fully trim the tree were probably drinking last holiday's cheers; only recently showing up to help with remaining decorations.  

So as we move toward year's-end and into early 2020; we'll see if all of this really 'caps' the market like an ornament on a tree. But of course, it gets more 'skittish' as I've sometimes said, once you get overbought (or fully decorated); as at that point any exogenous event (or credit market shift perhaps) can dislodge the decorative peak ornament (the S&P) as some sort of pullback unfolds.  

However even that will likely be contained, unless or until we get to the point where interest rates star ticking-up, which is one significant way I depart from those who see a smooth glide-slope entirely through 2020. But again; that's something I've expected to be a positive if absorbed in a constructive way (when the Fed tried it a year ago it was premature, and in fact assisted our getting an important 'capitulation' right into the Christmas Eve buying opportunity amidst panic that among some of the hedge fund crowd has remained wrong-headed all through 2019).  

  

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