There are a lot of frustrated investors that got wrong-footed following the November 8 election. However, there was a brief dip the morning after the election, and there have been some pauses/dips in this Del Shannon “Runaway” stock market. And a runaway market it has been, at a day count of 26. Recall that “buying stampedes” typically last 17 to 25 sessions with only a one-to-three session pause/pullback before they tend to exhaust themselves on the upside. It just seems to be the rhythm of the thing in that it takes that long to get everyone bullish just in time to make a top. While some stampedes have lasted 25 to 30 sessions, it is fairly rare to have one extend for more than 30 sessions. That said, in the spirit of “markets can do anything,” the longest stampede chronicled in my notes of some 50 years ended on June 8, 2016, at session 82. The next-longest lasted 43 sessions and before that the longest was 38 sessions. So even though this stampede is long of tooth by day count standards, Andrew and I have not given up on it. Also worthy of consideration is that the NYSE McClellan Oscillator is pretty oversold (see the chart).

Another bullish data point was offered up over my lunch yesterday with Ron Baron (Baron Funds) when he told me some of the financial advisors he speaks with have told him many of their clients have more cash in their portfolios than they did at the March 2009 low. “Wow,” I said, “That’s stunning!” Accordingly, despite one of my very short-term indicators currently looking for some kind of mild pullback from a “peak” this week, we have counseled folks not to try and get too cute with this rally. Yes, we know the S&P 500 futures have rallied over 200 points from their November 8 overnight lows, and that is one heck of a rally, so a brief pullback is certainly not out of the question. Our work would target 2,200 to 2,230 as the maximum drawdown. In fact, a full retracement of the most recent leg to the upside works out to 2,230. Yet such a pullback only serves to rebuild the market’s internal energy and extend the rally. To be sure, our models called this rally and they continue to suggest stocks will grind higher into late January or early February. This morning, the world is flat.

“Jeff, even before the election your models were suggesting the stock market was going to go up no matter who won and that we should buy the dips. But there haven’t been any dips." -- a frustrated financial advisor