How fitting we are getting the Suez Canal blockage at the same time the stock markets upside is meeting resistance.
— UPBOptionMil (@UPBOptionMil) March 25, 2021
Stuck, blocked, unmoveable. It makes sense really, after such a massive move to the upside.
Less than a year ago, in the thick of the Corona Virus... stocks were moving higher on the heels of terrible economic data, horrific jobless claims number... and a lot of uncertainty.
Here we sit nearly a year later and things are a lot more certain. The consensus has gone from wondering why the heck stocks are rallying, to looking for massive inflation in the months ahead.
The market went from pricing in a massive central bank response to the pandemic, to pricing in the possible end to easy money policy. Despite the fact that the FED has stated they are in no rush to take their foot off the gas pedal.
Every dip remains a shake of the tree. Stocks are going higher. New record highs are coming. I've said it over and over. Each time explaining that... stocks have been making new record high after new record high, and until that pattern changes I'd rather be following the trend than fighting it.
Clearly there remains more than a handful of risks ahead. There are always risks/ reasons to sell. And more often than not they end up being great buying opportunities.
My fear all along, about what would derail this bull market has been the Goldilocks environment of no inflation ends and The FED is forced to send the funds rate trending higher for the first time in 40 years.
And yet the FED has stated they are in no rush to let inflation dictate their policy actions. They are willing to allow inflation to run hot for an extended period.
With that being said, the inflation fears, and interest rate worries we have been seeing will be just another excuse to sell.... meaning the stock market will be higher in the months ahead.
Could I be wrong? Sure. But calling for higher stock prices has been the right call the last 12 years. Stocks are trending higher. And until that stops those calling for the epic collapse of the equity market will continue to be wrong.