Excerpt from Raymond James strategist Jeffrey Saut's latest essay:
...[The market's] “painful ups and downs” have become a way of life to investors and traders recently, for as repeatedly stated in these missives we are experiencing the longest skein in the Dancing Dow of “up one day and down the next” since the 1940s! Still, our thesis remains intact in that the “selling stampede” ended on July 15, 39 trading sessions from the mid-May highs. From those lows, we have suggested the equity markets were likely involved in a “buying stampede” that would eventually carry the S&P 500 (SPX) into the envisioned target zone of 1320 – 1330.
The call for this week: Friday’s date read “8-8-8,” which is considered by many to be a pretty lucky sign. Consequently, there were a plethora of Asian weddings, the likely reason why the Olympics began on Friday, and the stock market reacted accordingly with its own celebration of +302 points (DJIA).
We think the “crazy 8s” will continue to party this week into our envisioned 1320 – 1330 target zone for the SPX, which is where we recommend selling your remaining trading positions and/or raising your stop-loss points.
Is this the start of a new secular bull market? We doubt it because by our notes there have been 24 daily Dow Wows of 300+ points and NONE of them have been within the confines of a secular bull market. We continue to invest and trade accordingly . . .