Patience Is Still Advised

From our vantage point, the current correction is not the beginning of a major bear market but a necessary and long overdue pullback that likely has further to go. Similarly, given the record number of months without as much as a 3-5% correction, which is quite normal and to be expected, this puts the odds for seasonality to weigh on stocks in the historically weak August-September (particularly September) period at much higher than average.
One reason why we don’t think this is the beginning of a major bear market has to do with the fundamental backdrop where, as we noted recenly on our Global Macro Outlook with Callum Thomas, a wide range of leading economic data still align with a positive outlook.

This post was published at FinancialSense on 08/21/2017.