Ugly, But True. And, As Usual, Late To The Party

“Wall Street looks to leave behind the half-year bear scare”

The above is a headline from an article and video a segment from CNBC’s “Trading Nation.” (3/18/19) The video is a three-way discussion with moderator Mike Santoli, Michael Bapis (Fios Advisors at Rockefeller Capital Management) and Craig Johnson (Piper Jaffray).

$64 question … Where do we go from here?

Where do we go from here now that we have reached the 6 month anniversary of the beginning of a near-bear market that culminated in the 2018 Christmas Eve massacre? You may remember that many of the wise heads in media/ pundit land said the huge bounce at the end of the year was a flash-in-the-pan. ‘Fade the bounce’ was the cry from many. Well, here we are, up 20% from that low and only 4% from the all-time-high of the S&P 500. Should we still be fading?

Our two experts are obviously on opposite sides of the question. Johnson is in the ‘we’ve come a long way camp.’ He sees the market not doing very much the rest of this year and raises the specter of seasonality (the dreaded sell-in-May-and-go-away construct). Meanwhile, Mr. Bapis is more sanguine. He sees the market as having more room to run. I’m in the Bapis camp.

In a backhanded (somewhat confusing) way the rest of Santoli’s article makes a strong case for an UP market

It is backhanded because Santoli makes some really bush league comments in the early going:

“Hard to explain comeback”

“There isn’t a catchy or fully satisfying explanation for why stocks have reclaimed so much lost territory so quickly.”

Are you kidding me? “In late December the Fed Chairman Powell (flanked by predecessors Bernanke and Yellen), totally softened his hawkish position. The Fed is back to a go-slow, data-dependent stance. Rates on the 10-year Tsy. are right where they were 4 years ago. Fed policy was a huge worry … now it appears off the table. Earnings season was fine. Oil prices, whose weakness for many was a sign of economic weakness, have rallied on OPEC production cuts (the weakness was and continues a result of oversupply). The economy continues to grow, albeit at a slower rate (absent the shock stimulant of the tax cut) … no recession. Brexit appears to be something that will not darken our door any time in the near future. The likelihood of a trade war also appears to have diminished considerably.

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Carl Schwartz 10 months ago Member's comment

Thanks. I'm a fan of Jeff Miller as well. I read his weekly article here regularly.

Bill Kort 10 months ago Author's comment

Thanks for your readership Carl. I think Miller and Fearand Greed trader are two of the best out there for content and a well reasoned market opinion.