Good morning.  Yesterday’s weakness was exactly what we were referring to when we wrote about the potential for a “mini daddy snap”.  While the weakness was blamed on the weaker than expected ISM report that measures optimism in the manufacturing sector, we believe it had a lot more to do with a very overbought market looking for an excuse to pullback.  As evidence, prior to the ISM release on Monday the Markit global PMI data showed better than expected manufacturing sentiment – especially in Germany and China, and the financial media was talking about how it was clear the global economy was bottoming.  Then the moment the ISM comes out, they go into “recession worry” mode.


It is so ridiculous how quickly sentiment can change, which is exactly why we rely on our core fundamental thesis with an overlay of our key tactical indicators.  As you know, we have been looking for a temporary 2-5% pullback in the S&P 500 (SPX) based on too much market enthusiasm but want to buy it because the four key reasons for our bullish outlook into early 2020 remain in place.  We are getting ready for that opportunity as the trade war rhetoric heats up heading toward the December 15th deadline.


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