‘A critical readjustment phase’ – is how a few analysts are finally starting to describe the market, which actually has been in a rotating readjustment sine I warned investors to seriously lighten-up in January’s unsustainable parabolic thrust; to the point of my finally issuing a ‘crash-alert’ warning for an upcoming big February break (followed by calls for a ‘ragged’ pattern; to say the least what has transpired throughout the first half of 2018).  

Now that we’ve gone through a half-year of ‘rinse & repeat’ cycles; most of which I’m honored to have reasonably identified in terms of probable S&P patterns; now, some come forth to suggest we’re going to see ‘adjustment’in the market. We sure are, and we sure did. Most deluded themselves to seeing strength, rather than rotation, through the year’s first half; and now a lot of pundits don’t want to recognize that the S&P high (for the Trump run we forecast if he won) essentially topped as indicated in January. All the ensuing rallies were glorified short-covering squalls as suspected; and none improved the generally lateral status of the S&P subsequently.  

While some will argue this sets-up a leg-up; I’ve disputed this technically. It is doubtless that a ‘real’ trade settlement (and that’s not unlikely) would for sure generate another rally, if for no other reason than ‘shelved’ CapEx or spending plans might be brought forward (surveys showed ‘confidence’ by businessmen dropped dramatically as trade tensions became real). But at the same time any such rebound would run into the ‘reallocation’ challenge that I’ve address and which (for some stocks) will vary from perceptions of a simple exodus from lesser-capitalized ETF’s, and so on. 

As a few analysts have become aware of this, they tended to reasonably fear what we talked about: shifts between stocks like Facebook, Google, Verizon, Intel, Micron and of course AT&T; all which will be impacted on the short-term when that happens in August and September (announced later in July). In fact that’s why my new bullishness on AT&T was tempered a bit; suggesting scaling-in in the 29-32 area with a portion of buying held back until we see reactions then (at lower or even higher price levels).