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Some pretty good thoughts here from Jeff Saut of Raymond James.  Everybody’s happy and that is making Mr. Saut a little bit nervous:

… “Money managers are unhappy because 70% of them are lagging the S&P 500 and see the end of another quarter approaching. Economists are unhappy because they do not know what to believe; this month’s forecast of a strong economy or last month’s forecast of a weak economy. Technicians are unhappy because the market refuses to correct, and gets more and more extended. Foreigners are unhappy because due to their underinvested status in the U.S., they have missed the biggest double play in decades. The public is unhappy because they just plain missed out on the party after being scared into cash after the crash. It almost seems ungrateful for so many to be unhappy about a market that has done so well . . . Unhappy people would prefer the market to correct to allow them to buy and feel happy, which is just the reason for a further rise. Frustrating the majority is the market’s primary goal.”

Robert J. Farrell

Bob Farrell was Merrill Lynch’s esteemed strategist for decades. He penned the aforementioned comments in September of 1989 after the D-J Industrial Average (DJIA) had risen from that year’s January price of 2100 to its September high of 2791 without any meaningful correction. Accordingly, those investors waiting for a pullback to “buy” were frustrated. Similarly, present-day investors are pretty frustrated as the DJIA has leaped from its August “low” of ~9940 into last Friday’s high of 11451 without any significant correction. The recent “Buying Stampede” began on September 1st with a 255-point Dow Wow and has continued for the past 47 sessions without anything more than a one- to three-day pause/correction before resuming the onslaught. The latest upside skein has eclipsed the 38-session march into the August 1987 “highs” that preceded the crash, as well as the longest “Buying Stampede” chronicled in my notes of some 40 years. Over the decades I have come to trust my “day count” indicator because it has worked so well. As stated in past comments, it is rare for a “Buying Stampede” to extend for more than 30 sessions. That is why I wrong-footedly turned cautious, but not bearish, on day 33 of the stampede (October 18th) with the DJIA at ~11159. Since then, the senior index has still not experienced anything more than a one- to three-day pause/correction; yet, has also not really moved significantly above the October 18th intra-day high, that is until last Thursday’s 220-point Dow Delight.

Source: Raymond James

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