Jeff Saut of Raymond James, who has pretty much been bullish throughout the rally, sees the good times going (although the market might be due for a brief pullback).
Why is he optimistic? It’s an idea he’s been banging on for a long time: Active money managers are behind the curve and need to catch up.
Festivus is alive and well, and the “Airing of Grievances” should be particularly loud since 2010 will go down as the worst year of underperformance by active money managers in memory. That will leave many of the pros unloved in the new year. Also unloved are the Financials, and consequently under owned, which if 2011 does turns out to be “The Year of the Banks” might explain why the Financials were up 4.92% last week. The Dow’s weekly-win of 2.6% broke the senior index out of its two- week trading range driven by last Wednesday’s 90% Upside Day. It was the seventh such 90% Upside Day since the beginning of September versus only one 90% Downside Day. That speaks to the strength of the underlying rally and continues to put underinvested PMs squarely in the crosshairs of the performance derby. That performance anxiety could increase if Lowry’s Buying Power Index travels above the Selling Pressure Index, which could happen this week. That said, the stock market is once again over bought so it would not surprise me to see a pause and/or pullback in the short-term. Nevertheless, I still expect the trend of buying the “dips” to continue. Watch the Financials; they may be the key to the stock market’s near-term directionality.
NOW WATCH: Money & Markets videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.