STOCK PRICES… EVERYWHERE… ARE HIGHER AND SHARPLY SO as all ten of the markets in our International Index have risen. This is a rare event and historically such unanimity amongst our “universe” of markets has marked important panic tops if this has happened after extended bull runs, or has marked important panic lows at the end of extended bear runs. Certainly this is not the latter. We obviously have considered the markets overextended to the upside and have been reticent about buying into them aggressively. As we said the other evening when on CNBC’s “Fast Money,” and as we’ve said countless times here in TGL, this is a bull market and in a bull market one can have only one of three possible positions: Very, aggressively long of equities on balance; pleasantly long of equities on balance or, finally, neutral of equities, and there is no question but that we’ve tended to err upon the latter two positions and “Err” is the proper word here for we have indeed erred.
Those who’ve thrown caution to the investment wind and have remained aggressively long have reaped their rewards and we applaud them for either their tenacity, or their brilliance or their obeisance to the trend. We have been “too cute by half” in fearing a correction that never seems to avail itself.
Given the recent weakness in the CNN Fear & Greed Index we were coming very close to buying equities aggressively, if only had this Index fallen to 20 or below, having been to 85 only a few months ago. It fell to 29 .....… close to 20 but not quite there. It has turned up from there. If that was this indicator’s low it shall be the fifth time in a row that it has made a progressively higher low since late ’14. Previously, going back to late ’14, the lows were very near to 0; then 5 in the autumn of ‘15; then 15 in the first few days of ’16; then 15 in the late autumn of last year and now 29.
We have no choice but to follow the “lead” from the CNN Fear & Greed Index and to be bullish of equities. To make it simple we shall return to our original thesis regarding the Trump Adminisration and defer to the “Mahoning Valley” rather than to Silicon Valley; that is, we’ll buy steel, and coal, and ships, and railroads and ball bearings and cement and weaponry et al, for if the Trump Administration does stand for anything it stands of infrastructure and defense. These things we can count and these things we can count upon. These things are simple being the things that if dropped on your foot shall hurt.