Raymond James strategist Jeff Saut offers his take on where the market is headed next.
Today is session 23 in the typical 17- to 25-session duration of a “buying stampede.” Such skeins only have one- to three-session pauses or pullbacks before they exhaust themselves on the upside. While a few have lasted for 25 – 30 sessions, it is very rare to have one last for more than 30 sessions. That said, this one feels like it will extend towards the State of the Union address slated for February 12th. That address will likely be viewed negatively by the equity markets, which should serve to finally bring about a 5 – 7% correction. How the stock market reacts following such a pullback will tell us a lot about the market’s future direction. In the interim I favour the upside with the caveat that this rally is long of tooth.
We have no idea if Saut is right or wrong or not, but do find it interesting that Obama’s comments are still viewed so suspiciously by market pros.
The market has gone on a huge tear during this administration, and yet there’s always this fear that Obama will say something about taxes that will cause investors to panic.