Seasonal tailwinds driven by end of year retirement contributions, bonuses, and portfolio re-balancing has offset uncertainty so far in 2020. Despite risks associated with impeachment, trade tariffs, and economic headwinds due to coronavirus quarantines in China, the S&P 500 has marched to new highs.
Getting off a moving bus doesn't make sense, but evidence is mounting that a short-term 3% to 5% pullback is likely. For example, over 47% of the 1,600 widely-traded stocks in our universe are trading more than 5% above their 200-day moving average, an uncommonly high level that's historically favored unwinding