If I sound like a broken record, I can only justify it with the fact that the market has indeed been rallying, as we’ve noted pretty much all year.

So, the technical backdrop remains bullish for risk assets, notably cyclical stocks with this past week’s acceleration one more confirming data point. Sure, some stocks are getting extended in the very short-term and the on-again off-again US-China trade friction could easily create some profit taking at any point.

However, despite potential near-term nerve-wracking volatility, the far more important technical focus is that longer-term cycle charts track an almost perfect bull market profile: An impressive surge through Q119 from long-term cycle lows at rising 200-week moving averages, followed by four to six months of orderly consolidation, followed by a second bull market leg up that broke out to the upside in Q419.

I look for the next tactical pause point to be in mid-late February based on our weekly momentum indicators.

Right here, right now, the cyclicals continue to stand out technically given most traded sideways in narrow, orderly trading ranges for four to six weeks after breaking-out in October. The charts of banks and industrials are the type you’d see in technical textbooks highlighting new bull cycles....

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