Have any of the indicators that we track started to turn to the bearish side? Yes. However, many of these indicators are “leading”, so the fact that an indicator has turned bearish doesn’t necessarily mean that stock market gains are finished. Bottom line? We’re not at full-blown worry just yet but things have definitely softened up.
A sideways, overvalued market, the end of a presidential cycle, and bearish leading indicators have the potential to create emotional behavior, which in turn can drive mistakes. We continue to seek returns in unexpected places, making decisions based on logic and critical thinking. The balance of the year has the potential to be rough, but we’re prepared to reposition into momentum, as it is identified.
– Greg Stewart, CIO