After yet another volatile start to the week, equity markets have resumed their uptrend following the Georgia election with cyclicals accelerating. Many managers have had to scramble to add risk back to their portfolios raising the question “has anything changed technically?”.

The simple answer is no. As I wrote last week “The first few days and weeks of January are notoriously volatile so I would caution readers of overreacting to headlines too quickly at the beginning of the year. It’s possible equity markets pivot lower early in January but my expectation is for an additional move higher into late January-early February before our weekly momentum data peaks signaling a tactical top.”

Looking through January, the technical roadmap that has the highest likelihood for success is further upside as more managers add risk and more cyclical exposure in anticipation of further stimulus. However, in the same way I’ve cautioned readers from turning overly cautious to negative headlines through the summer and fall, particularly around politics, I will be cautioning investors from becoming excessively bullish, at least from a tactical, multi-month perspective heading into late January and early February. I can’t state for certain that we will see the market pullback, ...

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