“People can do more than they ever believe they can do. Physically, mentally, academically. You have to be pushed. It hurts. But it's worth it, and it's a great thing. ~Sugar Ray Leonard

Good evening,

Equities had something of an uncertain start this week, with the S&P 500, Nasdaq, and DJIA all declining. On Tuesday, the S&P 500 fell more than 1%, and as Fundstrat Head of Research Tom Lee pointed out, such declines often cause habitual top callers to proclaim the end of the latest up move. 

However, Lee pointed out that after each of the last two times such declines took place – January 31, 2024 and February 13, 2024, “those dips were bought and the market went on to make new highs.” That happened again this week, with the S&P 500 making new highs on Thursday.

Nevertheless, Lee sounded a cautionary note. As he has pointed out in the past, one signal of an impending top is stocks falling after good news. As he sees it, “in a way, a drop in rates is a ‘good news’ event,” yet when yields fell on Tuesday, the stock market also fell (as shown in our Chart of the Week). Because of this, he urges watchfulness even though he continues to suspect that there is still “gas in the tank” of this rally.

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Markets rose on Wednesday and Thursda...

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