We are currently in tactical and fundamental no-man’s land.

Tactical backdrop:

  • Market reached intermediate-term oversold enough in non-recession crash to suggest the 12/24 low should be “the” low
  • History of post-crash environments shows there should be a retest of the low
  • Short-term overbought by every measure, even to the point where it reinforces the historical precedent of a retest
  • Our rally requirement indicators recently signaled that weakness toward the lows should be used as an opportunity to add exposure rather than something to fear

Fundamental backdrop:

  • There is clear slowing in the global economy, which has been the case for the past year
  • The slower it gets, the better because it should cause the global central banks to end any tightening measures
  • Our January Macro Slide Deck continues to reinforce that while there is clearly a slowing in the domestic economy, the direction should remain positive, and as a result, the equity markets should recapture the highs once the current period of fear settles down

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