January 8, 2024
Good morning,
The first week of the year was a down one for stocks, bonds, oil, and gold. Only the dollar and volatility moved higher. The S&P 500 Index was off -1.52% for the first down week since October. Yikes, that’s a long stretch and that sentence underscores the technical strength the year-end rally demonstrated. The only technical signals not registering strong bullish readings are sentiment signals. So, we have a market with a strong tape (#1 rule: Don’t Fight The Tape) but a severely overbought one – the perfect recipe for a correction. The strong tape is the reason first corrections are not normally very deep or long lasting, and typically, do not damage the technical picture much. Ensuing corrections is where the battlefield between bulls and bears lies – a choppy period of sideways price action. If the bulls prevail, the market resumes its upward trajectory following what is called a consolidation. If the bears prevail, the sideways battlefield zone is labeled a top.
Labels are always applied ex-post, which makes them useless when looking ahead. It seems that the first correction began last week, and little technical damage was registered. I do not know whether the correction is over and Futures this morning (virtually unchanged) are not offering any clues. Mathematically, -1.53% is irrelevant following a 16% gain in 9 weeks. I lean toward not-over. Also note that when the first corrections are over, markets tend to test their highs.
Overall, I think the market has entered its consolidation phase (or top, it can’t be ruled out, we’ll see) with bulls holding the upper hand for now (b/c of the strong Tape readings). Consolidation or top, we likely have a choppy, sideways period ahead – maybe into the second quarter.
I’ll be sending my Monthly Note to you later this morning (I hope).
Be well,
Mike
Disclosures
Investment advisory services offered through Robertson Stephens Wealth Management, LLC (“Robertson Stephens”), an SEC-registered investment advisor. Registration does not imply any specific level of skill or training and does not constitute an endorsement of the firm by the Commission. This material is for general informational purposes only and should not be construed as investment, tax or legal advice. It does not constitute a recommendation or offer to buy or sell any security, has not been tailored to the needs of any specific investor, and should not provide the basis for any investment decision. Please consult with your Advisor prior to making any investment decisions. The information contained herein was compiled from sources believed to be reliable, but Robertson Stephens does not guarantee its accuracy or completeness. Information, views and opinions are current as of the date of this presentation, are based on the information available at the time, and are subject to change based on market and other conditions. Robertson Stephens assumes no duty to update this information. Unless otherwise noted, any individual opinions presented are those of the author and not necessarily those of Robertson Stephens. Performance may be compared to several indices. Indices are unmanaged and reflect the reinvestment of all income or dividends but do not reflect the deduction of any fees or expenses which would reduce returns. A complete list of Robertson Stephens Investment Office recommendations over the previous 12 months is available upon request. Past performance does not guarantee future results. Forward-looking performance objectives, targets or estimates are not guaranteed and may not be achieved. Investing entails risks, including possible loss of principal. Alternative investments are speculative and involve substantial risks including significant loss of principal, high illiquidity, long time horizons, uneven growth rates, high fees, onerous tax consequences, limited transparency and limited regulation. Alternative investments are not suitable for all investors and are only available to qualified investors. Please refer to the private placement memorandum for a complete listing and description of terms and risks. This material is an investment advisory publication intended for investment advisory clients and prospective clients only. Robertson Stephens only transacts business in states in which it is properly registered or is excluded or exempted from registration. A copy of Robertson Stephens’ current written disclosure brochure filed with the SEC which discusses, among other things, Robertson Stephens’ business practices, services and fees, is available through the SEC’s website at: www.adviserinfo.sec.gov. © 2024 Robertson Stephens Wealth Management, LLC. All rights reserved. Robertson Stephens is a registered trademark of Robertson Stephens Wealth Management, LLC in the United States and elsewhere.