“If you have a clear mind, you won’t have to search for direction. Direction will come to you." ~ Phil Jackson

Good evening,

The last trading day of the month and quarter arrived on the Thursday of a shortened trading week. Markets continue to advance, with the S&P 500 closing at new all-time highs on Wednesday and Thursday, notching five consecutive months of gains. Fundstrat Head of Research Tom Lee sees more gas in the tank, with fund flows and cash on the sidelines suggesting that we have yet to approach a top in this latest rally. As he pointed out to clients this week, $22 billion was taken out of the stock market between March 13 and March 20: “Clearly, people aren’t that bullish if they’re withdrawing funds from the U.S. equity market.”

Mark Newton, Head of Technical Strategy, agreed. For him, extremely bullish optimism would be a warning sign. However, right now, in his view, “sentiment is not that extraordinarily giddy and complacent. We don't see indiscriminate buying across the whole market.” 

Adding to Lee’s continued constructivist view, while margin debt rose in February, it remains “well below” October 2021 levels – as shown in our Chart of the Week below. “So I think there’s still plenty of dry powder,” he asser...

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