It is important in a fear driven market rout (like the present) to acknowledge that fear could drive the market lower still. That being said, do you really believe that the current market level (plus or minus a little) is
where the market will stay? With almost
50% of investor cash on the sidelines( an all time high), we think the momentum will eventually reverse and head higher once again. As Larry Kudlow likes to say "free market prosperity will return" and hopefully soon.
The negative tenor of the market is to a large extent due to the unwillingness of the new administration to acknowledge market stability as even a tangential objective. Hopefully this will change as early as today when the Treasury Secretary visits Capitol Hill . Valuation levels are bordering on ridiculous levels for most stocks.
Bear markets end when investors give up hope (capitulate). Looks like we are getting close to that point.
