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As 2024 Rally Rolls On, Traders Hear Echoes Of 2021
"Stay bullish."
That's the message from a lot of people. From anyone you care to ask, actually, with a few notable exceptions.
In this case, the crowd'll be forgiven for their ostensible "madness." "Stay bullish" has been the right call for months, and being wrong over that period was enormously costly.
I realize this a bit repetitive, but have a look at the chart below, which I stumbled into Thursday while trying to goal-seek something worth highlighting in Excel.
Simple? Sure. Poignant?
Good thing for Wall Street that multiple international catastrophes are apparently irrelevant.
Yep, Yellen and Powell worked in concert to help Biden. Yellen’s bond management and public comments just before Powell effectively announced the Fed shift signaled as much. Time will tell if they started their “kick” too early. Market seems to be betting they’ll do everything imaginable to keep moving the put higher.
Just eyeballing the chart, after the signal first ticks into the euphoria zone, the market index does well over the next year as often as it does not.
Can’t help but notice what’s on the other side of the previous two “S&P bonanza” peaks highlighted with green circles on the chart.
No, Marto, I think you’re reading the chart wrong. Dropping down from the peak is NOT market falling, it’s simply slower 4-month growth in the market. The way to read this chart is that anything above the zero line represents a positive 4-month return from the market, anything below the line is a negative 4-month return. So… after the 2019 pivot (anecdotally which I profited from thanks to H’s coverage), there was barely even one tiny blip in 4-month returns until the Covid crash in March 2020, and then again after the Covid recovery peak on this chart we had continuous 4-month periods without a loss until early 2022. So actually everything went really well for the markets after those sharp peaks for quite some time, just with a bit less euphoria and a little more climbing-a-wall-of-worry media coverage.
Yeah, that’s a rolling four-month window. Only negative readings are negative returns.