The 2023 Bull Market Was a Lie


Bull market - The 2023 Bull Market Was a Lie

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I’m blown away by how people don’t see the truth. Everything I do is ultimately about looking at various parts of the marketplace using intermarket analysis to get a sense of what’s going on beneath the surface. I will be bearish when conditions suggest I should be. I will be bullish when conditions suggest I should be.

Here’s some hard truth: The bears won this year.

Read that sentence again.

The BEARS WON year to date.

Nearly two-thirds of the stock market is NEGATIVE after inflation on a year-to-date basis.

You want to disagree with me on the timing of the credit event? Cool. You want to disagree with me on Treasurys as a risk-off, safe-haven trade? Cool. You want to disagree with me that 2023 has NOT been a melt-up year? You are living in a fantasy world.

The truth is most stocks have done terribly this year.

Now keep in mind, this is NOT necessarily a bad thing on a go-forward basis. The number of stocks down this year, as well as the underperformance of small-cap stocks relative to large-cap stocks, DOES create some real opportunities. I’d argue this is actually very likely and tradeable. Recall that I argued that if we don’t crash, the trade would be small-cap stocks and emerging market stocks.

That does seem possible. The bull argument would be that we have a catch-up trade now as all these laggards start to gain steam. It is entirely possible (though I maintain risk is high for a credit event). And while I’ve been loud and skeptical about a seasonal rally playing out this year, for all I know, it could. Maybe there is some super spike coming in risk assets that will help left-for-dead stocks get some real traction.

The Bottom Line

Regardless, this is about perspective. This HAS been an EXTREMELY difficult year for advisors and investors. To think otherwise is denying literal, factual data. We have been in a bear market, and we won’t know when a bull market happens until AFTER you take out the prior inflation-adjusted peak for most stocks. This means we only know if we are in a bull market with hindsight.

What do we know for sure with hindsight? This has been a money-losing year for most.

On the date of publication, Michael Gayed did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines.

The Lead-Lag Report is provided by Lead-Lag Publishing, LLC. All opinions and views mentioned in this report constitute our judgments as of the date of writing and are subject to change at any time. Information within this material is not intended to be used as a primary basis for investment decisions and should also not be construed as advice meeting the particular investment needs of any individual investor. Trading signals produced by the Lead-Lag Report are independent of other services provided by Lead-Lag Publishing, LLC or its affiliates, and positioning of accounts under their management may differ. Please remember that investing involves risk, including loss of principal, and past performance may not be indicative of future results. Lead-Lag Publishing, LLC, its members, officers, directors and employees expressly disclaim all liability in respect to actions taken based on any or all of the information on this writing. Michael A. Gayed is the Publisher of The Lead-Lag Report, and Portfolio Manager at Tidal Financial Group, an investment management company specializing in ETF-focused research, investment strategies and services designed for financial advisors, RIAs, family offices and investment managers. InvestorPlace readers that are new subscribers to the The Lead-Lag Report can receive a 30% discount.

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