It might not be Japan’s 60%+ equity market rally, but the S&P seems to be setting all kinds of records that even have the real veterans left confused (via Jeff Saut):
“As for the overall stock market, today is session 82 in the now legendary “buying stampede” because the Industrials have not experienced as much as a three consecutive session decline since the back-to-back 90% Upside Days of 12/31/12 and 1/2/13. At the time I was writing that such back-to-back sessions have left the INDU up 12.8% three months later 100% of the time; and while we didn’t quite achieve that this year, we certainly came close. Last week’s rally occurred from marginally oversold levels with the Buying Power Index rising while the Selling Pressures Index fell. Buying has also been broad based with all of the Advance/Decline metrics I monitor reaching new bull market highs. In summary, the data suggests the equity markets have once again dodged the opportunity to correct in any meaningful manner; and I must admit, I have NEVER seen anything like what has occurred since the “buying stampede” extended beyond the previous record of 53 sessions! That said, my work continues to suggest the equity markets do not face a period of serious vulnerability until this summer, unlike the last three years where “Sell in May and go away” has played so well, provided you redeployed the cash raised in the spring to stocks sometime during the summer months. I don’t think the scenario plays that way this year.”
Mr. Roche is the Founder and Chief Investment Officer of Discipline Funds.Discipline Funds is a low fee financial advisory firm with a focus on helping people be more disciplined with their finances.
He is also the author of Pragmatic Capitalism: What Every Investor Needs to Understand About Money and Finance, Understanding the Modern Monetary System and Understanding Modern Portfolio Construction.