Meta Strategy Trading Portfolio – Probability Map Update.

The V-bottom Era

We are witnessing a momentum thrust for the ages: On every metric the current stock market rally is truly exceptional.

Generally, momentum and breadth thrusts are very bullish and are a trigger for me to reset my expectations: Higher stock prices in 6-12 months are highly likely.

Over the short term the stock market is incredibly stretched and some normalization and mean-reversion can be expected.

The best course of action is to define clear areas to get back in during temporary weakness over the next weeks – pullbacks are likely buyable.

The elephant in the room is seasonality: My midterm year projection shows a distinct period of weakness with a 10-20% decline for the S&P 500 starting just about now lasting into the summer before strength sets back in.

Is this still to come or has it been pulled forward and has already happened?