Caution Beats Conviction
Are We There Yet?
Waiting On China
Big Level On Deck
The Week Ahead & Q2 Plan
Are We There Yet?
As markets approach their highs, as if on cue, Tom Lee at Fundstrat calls a market bottom TODAY as Yardeni comes out to remind of their $7,700 S&P year-end target😉
Price drives narrative. And the narratives for this reflexive move past ten trading days fall firmly into the camp of:
Headline-driven
Mechanical-buying
Short-covering
V-shaped
Exhaustion buying
Structurally, nothing has changed:
Global, Fed & Market Liquidity are fading
Inflation is rising as Fed rate cut odds fall
Data shows no economic or labor expansion
Supply Shock from war are not priced in
Geopolitical escalation & trade wars are not priced in
All of this is to say, the war can drag on and on - in wide whipsaws of volatility up and down - until corporate earnings price in margin contraction. Then the market will care.
For now, we hit 6845 Friday then gapped down before getting bid back to to 6886 today - nearing that SPX 6900 call wall highlighted last week.
