Jeffrey Saut, the Raymond James strategist whose calls have been extremely prescient over the past years (on a week-in, weak-out basis) says not to get too excited about Friday’s surprise move up. We’re only halfway through the selling stampede.
The call for this week: Economist, historian, and savvy seer Eliot Janeway stated decades ago, “When the White House is in trouble, the markets are in trouble!” Plainly, we agree and would add that the January Barometer has registered a cautionary signal, as has Lucien Hooper’s December Low indicator. That said, Friday’s turnaround, accompanied by pretty oversold readings, should lead to some sort of one- to three-session rally attempt. To that point, the NASDAQ 100 (NDX/1746.12) was “up” last week (+0.29%), as was Info Tech (+0.72%), Materials (+0.83%), and Natural Gas (+6.7%); so they may lead the “bounce.” Luckily, we have investments in all of these complexes. However, at session 14, in the envisioned 17- to 25-session “selling stampede, we remain cautious.
The line about The White House being in trouble is an interesting one (and we’d love to see a long-term argument for that), but either way it prompts Saut to observe what we recently noted, which is that ever since Scott Brown got elected, the mood has changed, and things have gotten ugly.