“I’m comfortable, despite the late year breadth and momentum consolidation underneath the surface of the markets, buying the dips hence forth and given the litany of quant data informing of higher prices by year-end. I can understand that many would not be as comfortable, given certain of the technical charts discussed, but do keep in mind that what is taking place is typical of strong bull markets initially executing a Zweig Breadth Thrust and everything rally to new all-time highs across almost all cap-tier levels and indices. That kind of bull market demands a breather, at least underneath the surface. There’s nothing ominous in the technicals, and just like a recession demands an exogenous/endogenous catalyst, I hold the view that such is the case with this bull market delivering a full 10% correction. Job growth has stalled, Mis are still below 50, yield-curve formerly inverted, Sahm Rule formerly triggered, Fed hiked at the fastest pace in 45 years and no recession. The demand for a catalyst to cause one is no different than what markets need to drive a full 10% or greater correction given the earnings strength and momentum trends. I’m not trying to tempt Mr. Market, but we had this same discussion to end October 2024, still yet without a full 10%+ correction on the year (-9.8%). That 10% correction didn’t come until the threat of severe tariffs in early 2025 ie an exogenous event.”
