Jeff Saut of Raymond James remains confident that the rally has legs due to the need for investment managers to impress investors as their fiscal year comes to a close. The pressure is on to catch-up with the averages:
The call for this week: In last week’s “Call for this week” we wrote, “With the Pros’ return we should get a better idea of the stock market’s near-term directionality. Our sense is they will show up in ‘buy ‘em’ mode since stocks just won’t go down and the Pros are staring at their October fiscal year.” And, they did just that as, “each competitor has (been forced) to pick not those faces which he himself finds prettiest, but those which he thinks likeliest to catch the fancy of the other competitors, all of whom are looking at the problem from the same point of view.” The important point is that although this runaway rally is extended, the supply/demand, and sentiment situation, is still favorable. So while the “music” may pause this week on worries the U.S. tire tariff being imposed against China using the “safeguard mechanism” agreed to under China’s WTO entry conditions, the “music” is likely not going to stop.