Please excuse the victory lap, but it is the new year, and many clients are asking about my views for the new year.

In early January of 2019 I made the case that for anyone with an investment horizon beyond a few weeks, a long-term buying opportunity was at hand given the long-term cycle backdrop. Now this coming Wednesday, January 15, I’ll review where equity markets are now following the 2019 rebound. I’ll discuss the framework supporting my view that equities to continue moving higher through 2020. (For more on the fundamental view see page Tom Lee’s report, page 3.)

The path to new highs in 2020 is unlikely to be linear, with a pullback potentially taking hold in mid-late Q1, something I’ve referred in the past issue. Why? First, the weekly momentum indicators I follow, tracking 1-2 quarter shifts, bottomed in Q3 but are now increasingly overbought. That suggests some type of pause or pullback is developing in the coming few weeks.

Secondly, by mid-late February investors are likely to shift their focus from the micro company specifics during the 4Q earnings reports period toward macro events notably election primaries and a potential in tone from the Federal Reserve regarding its balance sheet expansion. The bottom line is that while 2Q and part of 3Q are s...

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