This is going to be an interesting week. As I mentioned late last week, there really isn’t any clear tactical edge here. The recent 2.6% pullback removed a bit of the overbought condition, and the recent ramp on the back of Friday’s Payroll Employment Report didn’t allow the market to reach closer to oversold as was the case early last week. In other words, it isn’t at either important overbought or oversold levels that would warrant an immediate action.
As you know, since July we have strictly focused on our front-end loaded SPX target of 3350. There were brief correction calls where our key tactical indicators suggested waiting to add exposure in case you were looking to put new money to work. There is a big difference between “not chasing” and being negative. Our core fundamental thesis has not suggested being negative since 2009, and frankly it isn’t saying to be negative now. Along those lines…
We are raising our 2020 S&P 500 (SPX) target to 3440.
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