Thoughts
2 am: April was probably the stock market's bottom. Momentum became very oversold in April.
Weekly momentum indicators are useful for predicting medium-term turning points in the stock market. The S&P 500'S 14 weekly Stochastic became very oversold in early-April 2018. Except for 1 case in 2011, this was a medium-term bullish sign for the stock market.
1 am: The road to a new all-time high won't be easy. It'll probably take at least a month.
The Russell 2000 (small cap stocks) is approximately 0.5% below its all-time high, whereas the S&P 500 (mid/large cap) is approximately 5% below its all-time high. (In other words, small cap is leading mid/large cap).
When this happened (historically), it took the S&P 500 at least 1 month (21 trading days) to make a new all-time high. This means that the S&P won't rally straight away to new all-time highs: it'll make some pullbacks along its rally.
This is logical. If Russell (small cap) is leading the rally, then it'll eventually hit a resistance somewhere and lead the S&P 500's pullback.
1 am: Buybacks are still far below 2007-levels. Not a sign that the equities bubble today = the equities bubble of the 2000s.
Permabears love anything that resembles 2007 (the start of the last bear market). That's why they're pointing to this estimate:
The nominal value of corporate buybacks in 2018 will probably = the nominal value of corporate buybacks in 2007
But once again the permabears make 3 simple mistakes:
