This weekend's Barron's featured an interview with Ned Davis and his top lieutenants discussing their views about the bull market. And the big take-away was that their research suggests a big re-set is coming in 2014.
It's hard to argue with any ideas about this bull market needing a correction bigger than the 6% blips we've become accustomed to this year. I'm all for a "cleansing" and fresh bargains before the S&P goes to 2,000 and beyond. And, by the way, I think the Secular Bear Market is over and we won't revisit the lows below 1,000. But that's a discussion for another time.
Anyway, the Ned Davis interview is definitely worth a read.
But what will be the catalyst to finally push institutions to become net sellers of their shares and start waves of selling that take the market to S&P 1600 (10% correction) or even sub-1500?
Sure the market is running ahead of the economy, but that might well go on as growth metrics improve and there's a shift from the Fed supporting the show to banks and corporations taking more risk with their war chests of cash.
In addition to giving me your "Correction Catalysts" and timing, answer me this:
Will the most-anticipated and most-publicized correction in history ever actually happen with so many calling for it? Probably not when most expect it to. In short, to reverse the freight train of institutional money flooding into equities, it will take an unexpected confluence of events.
I'll tell you my perfect storm of catalysts later today -- after I hear yours.
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