About a year ago this week, just before the one-year anniversary of this market rally, there were about 45 IGVSs priced 15% or more below their 52-week highs. The market seemed to be entering a corrective phase, but it just never happened.
A year later, the market statistics, all of them, are shouting at the top of their lungs — the correction is coming! The correction is coming!
Portfolio “smart cash” is at pocket-hole-burning levels; less than 3% of all IGVSI stocks are even close to “bargain” prices; new 52-week highs have more than quintupled new lows; and issue breadth has been exceptionally positive.
Those of you who are “in the know” will recognize “smart cash” as the type that is created by targeted profit taking plus dividend and interest income. It reflects an Investment Grade Value Stock Index (IGVSI) that has surpassed its pre-financial crisis record high — in spite of the fact that all the other averages remain below theirs.
Most (equity heavy) Market Cycle Investment Management (MCIM) program portfolios are at all time high profit levels; income heavy allocations have fallen victim to the buying panic of stock market speculators, higher interest rate expectations, and overblown concerns about state and municipal treasuries.
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