Like golfers and LeBron James, traders need short memories lest they become haunted by their failings in critical moments. Both life and trading are about living in the now, regardless of past humiliations.
And so it is for those who missed the stock market's screaming rally over the last two months. Those who did can't blame Jeff Saut. The Raymond James chief investment strategist went aggressively bullish the day after Thanksgiving. Since that time the S&P500 is up over 130-points, more than 11% and some 50-points above the levels at which the index started, and finished at in 2011.
Returning to today's tape, Saut has been looking for some sort of pullback to relieve our overbought condition. He's gotten something better as "all we've done is go sideways," albeit only since January 10th. It's good enough for Saut, given the relatively small number of traders caught off guard by market leap.
Saut notes that hedge funds are less than 50% long by some measures and in his view, "the world is profoundly under-invested in U.S. stocks." He has a laundry list of bullish catalysts, including Europe's ability to continue to "paper over" its growing list of woes takes the Continent off the table, at least for the time being.
Disagreeing with all but the most recent of Breakout! views, Saut says that a strong U.S. dollar is bullish for stocks, "provided it's not too strong." Too strong is relative in currencies. By implication and assertion, Saut's notion that Europe can fake it 'til they make it will keep the Euro from going to something resembling zero --the fake currency's intrinsic value.
Saut's view of the coming elections are making him more bullish still. Citing Adam Smith, the strategist contends the economy's animal spirits have been constrained by inefficient, excessive, government involvement. "The American public is angry with all politicians," he says.
Come November when the political bums get tossed from office, stocks will have yet another reason to move higher; not that Jeff Saut thinks the bulls need one.
Is the world under-invested in U.S. stocks? Let us know if you agree with Saut in the comment section below or visit us on Facebook.