2016-04-25 2pm EDT  |  #stocks #Barron's

The other day I was watching an interview from one of these new slick investment websites. This particular firm is extremely bearish and loves making fun of “old Wall” and their inability to realize the inevitability of the coming collapse. Their street cred went through the roof during the January/February air pocket, but they have clung to their bearish views during the ensuing rally.

And they are by no means alone. The idea that monetary policy has failed miserably and markets are about to implode into a deflationary black hole has become consensus thinking amongst the fast money crowd.

What was especially hilarious during this video was that in an attempt to justify the non-confirmation of market action, the market pundit said something to the effect “the largest rallies occur in bear markets.” I nearly spit out my coffee as I heard this absurdity.

Of course I know the largest rallies occur in bear markets, I don’t dispute that one bit. I remember all too well the 5%-10% one or two day face rippers during the 2000-2002 bear market. Those were text book examples of large violent rallies occurring in a monster bear market.

But how does anyone think we are in a bear market today? Last I checked the S&P was hovering near the highs.

I am by no means advocating loading up the boat based on a price action. But at the same time, I am shocked at how many market pundits are fighting the tape. Too many have decided we are already in bear market even as stocks push up to the highs.

If you want to preach caution, then fine, I will buy that argument. But skip the BS about the largest rallies occurring in bear markets. We are still miles away from a true bear market…

Barron’s Big Money Poll

And I am not just picking on this one website. Over the weekend Barron’s released their famous quarterly “Big Money Poll” where they survey large institutional investors about their market forecasts. In their 20 year history, Barrons reported:

“The spring 2016 poll is one of the least bullish ever.”

Usually these guys are falling all over themselves with bullishness. This latest survey reflects a deep pessimism about both markets, and the global economy.

I will not bother defending the bullish case. I can’t. But I know the wall of money flowing into risk assets is overwhelming any poor fundamentals. I just don’t see the reason to fight it, especially since it looks like everyone else is joining the dark side at an alarming rate. The bearish side of the boat is getting way too crowded. There are way easier trades out there where price action is confirming fundamentals, so why bother fighting the stock market along with everyone else?

This situation, where prices divert so far from apparent fundamentals, reminds me of one of the famous sayings about research analysts:

Research Analysts: in a bull market, who needs them? In a bear market, who can afford them?

Right now the market continues to walk higher even in the face of the “terrible macro outlook.” I have learned the hard way fighting the market on the advice of some analyst is often a terrible trade. Especially when that analyst is so bearish, he is using lame excuses to justify the monster rally he did not forecast.

Thanks for reading,
Kevin Muir
the MacroTourist