Stocks up 65% of the past 20 trading days, highest since Nov 2021, and a reason it is starting to "feel like a bull market." We expect 1Q23 EPS to exceed expectations, likely 2H23 trough in EPS = supporting strengthening breadth.

The S&P 500 is up 8% YTD (~+20% in the past 6 months) and at this pace, is annualizing returns of ~30% -- that is not our forecast. And as we highlighted earlier this year, the "rule of 1st 5 days" (neg prior year and >1.4% gain in 1st 5 days) implies ~20% gain for 2023.

But despite these fairly impressive gains, this does not "feel" like a bull market for investors. There are several reasons for this including (but not all): (i) Fed is tightening and has stated that it intends to keep hiking (even as bonds call opposite); (ii) EPS estimates are down and YoY is negative (nadir in 2H23) and (iii) the stock market just doesn't feel consistently rising -- last Friday's reversal is an example.The stock market is beginning to "feel like a bull market" as the % of up days (of the past 20) reached 65% last week -- the highest figure since Nov 2021. For the 15 month period from Dec 2021 to March 2023, this figure never exceeded 60% and was a crushing mere 20% on Oct 12, 2022. That date of that 20% reading is also the date of the recorded low.The first chart of this note shows this ratio curled up sharply and we believe will soon reach 70% in coming weeks, aided by what we expect to be better than expected 1Q2023 EPS results. And as such, the rise in equities will soon ...

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