Mid-week market update: Several readers wrote me this week with similar comments, which went something like, “I concur with your bullish fundamental reasoning, but the stock market is trading little ‘heavy’ and I am concerned.” I agree 100%. Despite the bullish fundamental and technical tailwinds (see Six reasons why I am still bullish), the market hasn’t been able to break out of the narrow range since the upside breakout in July to new all-time highs.
Ryan Detrick at LPL Financial characterized this market as a “historic holding pattern”:
What has happened the past four months is truly historic, in that nothing has happened. For equities to trade in this tight of a range near all-time highs is extremely rare and we probably have the election to thank for it, as big money would rather wait until the results before making any moves.
From a technical viewpoint, neither the bulls nor the bears have been able to muster sufficient strength to break this market out of the narrow range. For both sides, they might have well been the characters Vladimir and Estragon in a production of Waiting for Godot. Nevertheless, there are plenty of reasons to be bullish on equities on an intermediate term basis.
The full post can be found at our new site here.