From Halloween to April Fools'
Always the contrarian
Last Halloween I declared “and so the party goes on” for the 2023 economy with strong spending and resilient housing, as Macro turned higher while SPX was hitting the lows near 4100 in October. Bull Market, I said, and add on dips (didn’t get one).
Markets move fast. SPX near 5250 in 5 months, up 10% in Q1. Almost April Fools’ fast.
Price is saying that Macro best days are still ahead because “cuts are coming”, but that’s not going to help the growing number of consumers reaching peak levels and are changing their spending habits. Maybe things are just not as good as they used to be, but instead not a single brick in the wall of worry.
Never afraid of a good conspiracy theory, the jobs market health is suspect. It’s too much from Govt spending, which although is still good Macro data it lacks the same growth and productivity gains as private sector jobs. Meanwhile, private sector has saved up so much cash that instead of buying their stock, they are buying AI to replace their workforce (eventually). So you could get yourself riled up thinking that all the “jobs” are coming from money printing while all the “R&D” is focused on reducing jobs. Seems like a bad trend.
I’m not saying it’s not a Bull Market still - you can’t, when it hasn’t even dipped 2% - but there’s nobody left who doesn’t see the perfect ascent.
When everyone sees the same lines working, Price acts differently when they break (yes, eventually Price will dip). Gap downs are more probable, and it likely won’t be a single day event.
A correction would actually be Bullish, shaking off weak hands and bringing in new swing longs that have waited patiently since February, taking 15% profits on the bounce from the October lows (aka MarketModel subs).
For whatever reason, a turn of the calendar sometimes changes the recent trend. Bulls have owned it for 5 months, and shorts only got paid on scalps by fading each touch of the upper Bollinger Band (aka Top Rail). If April is going to be different - the month will make a lower high, Support MAs stop working, and Bears might actually get paid better by turning those scalps into swings.