The market feels like its chasing performance to me. When I look at the longer term chart, I think we are heading into dangerous territory. We have had an incredible run since the depths of 2008. Bull markets don’t last forever. Usually there is something that precipitates a bear market. No one of course knows what it is but the Trump presidency does provide some catalysts. Rising rates, protectionist policy, inexperience are just a few of the possibilities. When I look at the monthly chart of the S&P 500, I note a disturbing divergence for the “new” bull case. The RSI has been trending down for almost two years while the market made new highs. Markets don’t go up forever and this bull is long in the tooth. The exact timing and the extent of the pullback is unknowable but don’t take bull markets for granted.
