Cyclicals surged this past Monday in response to Pfizer’s vaccine announcement prompting some of our clients to ask whether they should fade the rally given the reacceleration in COVID cases.

While I am expecting equity markets to chop sideways in the very short-term to digest their recent gains, I do not recommend fading the recent rally in equities overall nor cyclicals specifically. From my perspective, I continue to see the technical backdrop improving rather than decaying and expect further upside through year-end well into the first quarter. Simply doubling the recent 11+% trading range that developed between September-November would support a move toward S&P 4000 by early-mid Q1. See this week’s chart featured below. More importantly, the longer-term 4-year cycle work I study suggests the current cycle should support equities through 2021 into 2022 before a cycle peak develops. If prior 4-year market cycles in secular bull markets are any guide for the current cycle, then a move toward 4400-4600 is possible before the cycle peaks.

The video in this report is only accessible to members
Looking at cyclicals more closely, I would hi...

Unlock this article with a FREE 30-Day Trial!

An FSI Pro, or FSI Macro subscription is required in order to access this content.

*Free trial available only on a monthly plan

Disclosures (show)

Get invaluable analysis of the market and stocks. Cancel at any time. Start Free Trial

Articles Read 2/2

🎁 Unlock 1 extra article by joining our Community!

You’ve reached your limit of 2 free monthly articles. Please enter your email to unlock 1 more articles.

Already have an account? Sign In

Want to receive Regular Market Updates to your Inbox?

I am your default error :)