Close to two months ago while the S&P 500 was still in the 4500 range, I published a note titled Throw Your 2021-2023 Playbook Out As We Have Entered A New Market Regime
In that brief note, I described the misery that would plague investors who actually thought 2022-2023 was anything but a psychological reset driven by hyper aggressive interest rate policy that did not come anywhere close to having the dire outcome most of us expected.
In fact, all that 2022-2023 did was to compress two wasted years into a secular bull market trend that is now seeking to unwind, as quickly as possible, the interest rate driven pessimism that has seen investors in a near perpetual state of misallocation, yet to be resolved to this day.
There is a lot of work yet to be done in order to correct the ills of the past two years.
That work will come in the form of persistent price movement that will continue to deny those who are looking for a retest of attractive levels the satisfaction of a decent entry.
Bull markets don't work that way.
Being forced to chase stocks is the path of least resistance.
Now as the market approaches persistent new highs, investors continue to have their eye off the ball looking for local tops in an attempt to avoid a 5% pullback in the S&P 500 instead of understanding the breakout we just experienced is a beginning, not an end.
This is a resumption of a secular bull trend that was only interrupted by an overanxious Fed in the face of deteriorating financial conditions brought on by rampant inflation. The rush to move to new highs in such a persistent manner since the late October low is all investors need to know about the degree of compression that took place in the face of hawkish Federal Reserve policy.
Forget everything you think you know about the markets of the past few years.
This is a different beast entirely.
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