As 2020 begins, there is some residual strength from the 4th quarter rally, but valuation and sentiment metrics would argue for a first quarter top. We believe we are in the final innings of the advance that began a year ago. After a consolidation/correction in the first half of this year, the ninth inning could occur in the fall going into the election. This would fit the presidential cycle that typically behaves this way during the presidential election year.
The third quarter was exhausting for investors. In March, the stock market entered a broad trading range of some 3000 points on the “Dow” (Dow Jones Industrial Average). Since August, The Dow has had eight 300 point up sessions and seven 300 point down days. Even as investors were whiplashed by myriad sharp reversals over this period, there has been little progress made in the overall markets.