Meanwhile, back at my perch from holiday, I am getting emails like this:

Jeff, it seems to me that you are the only bull out there. The money flows out of equity mutual funds. The mood of individual investors and a lot of market pundits are so negative. The cash levels of money managers are at pretty high levels. What will be the catalyst that will lift the equity market to new highs based on your internal energy buildup scenario? It is hard to see with August, September and early October being very volatile months in my experience. Did I mention that Goldman Sachs Market Strategist just put out an article in the last week calling for a 10% correction? Your thoughts?

Indeed, “If the people don’t want to come out to the ballpark, nobody’s going to stop them!” Just substitute “investors” for the word “people” in that quote and you have the current stock market sentiment. However, since the February “lows,” and again at the Brexit “lows,” Andrew Adams and I have tried to tell investors that the equity markets are going to go a lot higher than most expect. Our model actually “called” the February low of 1810 on the S&P 500 (SPX/2182.87) and targeted new all-time highs. Moreover, Andrew and I “called” the “Turning Tuesday” low following the Brexit vote again with the mantra of “New all-time highs.” We have consistently written about stocks, mutual funds, and ETFs for consideration in portfolios. In this business when you are wrong, you say you are wrong, yet you need to be wrong quickly for a de minimis loss of capital. To wit, “We made too many wrong mistakes.” However, “You can observe a lot by just watching;” and our observation that “The stock market has decoupled from the fundamentals” since February has been net-worth changing. Or as another great markets observer once opined, “The stock market can stay irrational longer than you can stay solvent” (a tip of the hat to John Maynard Keynes).

The call for this week: “When you come to a fork in the road, take it!” We did . . .

Jeffrey D. Saut is chief investment strategist at Raymond James.

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