"To the victor go the spoils," New York Senator William Marcy famously said of the benefits that come with winning elections. Right now, the spoils are clearly going to the prettiest girl at the dance, also known as the U.S. stock market, which is flirting with a record high and basking in the glory of its best first-quarter gain since 1998.
Yet for all that victory, many investors are having a hard time embracing it, including Steve Hochberg, chief market analyst at Elliott Wave International, who says certain things are happening on the sidelines that are about to cause some real problems.
"There are a lot of things going on in the periphery that we think are going to have consequences [for the stock market] as we move forward throughout the year," Hochberg says in the attached video. "I think there is tremendous risk in this market, and one of the reasons is because no one thinks so right now."
Whether it's too many bulls and too few bears, a rising dollar, or long-term interest rates that have been rising since last July, Hochberg simply says that "everyone seems to be on one side of the ledger."
And we all know that never ends well.
To critics who say his bearishness has cost him a huge opportunity, Hochberg concedes this four-year-old rally has extended longer than they thought it would, but says "a breakout in optimistic indicators" lately is starting to bring more people over to his side.
"I think this year might be the exception to the historical norm," he says of the adage sell in May and go away. "I think it's sell now through May."
Hochberg predicts we are in for a long, drawn-out decline, one that will ''definitely take us back to the March 2009 lows."