We continue to expect a brief pause in the upside despite the rally over the past week and acknowledge this is one of those times to avoid the urge to splurge on stocks.  Our four key tactical indicators continue to point to an overbought condition and well known bears are turning more positive.  The time to be aggressive was in early October, and now we believe is the time to get ready to add exposure as any correction plays out.


As you know, our larger message highlights buying into any weakness once it develops as we look forward to our 2020 target:


Four reasons we are bullish and offensively positioned into a 2-5% pause in the upside:

  1. Folks printing money continue to tell us they will continue an accommodative stance.
  2. The corporate market remains open and Bank Lending Standards remain easier in most recent data.
  3. There is an inflection in global manufacturing off historically weak levels.
  4. Demographic tailwind with the Millennials peak birth year (1990) turning 30 amid solid employment, good confidence, and low rates.


I continue to reiterate our 3350 SPX 2020 target that is front end loaded:

  • The story for 2019 was slow growth, easy Fed, and lower U.S. Treasury yields.
  • The story for 2020 is economic re-acceleration, a neutral Fed, and marginally higher U.S. Treasury yields.


Past performance is not a guarantee of future results. Index returns are unmanaged and do not reflect the deduction of any fees or expenses.

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