Well, Mark Cudmore is back on the clock after an extended vacation.

Monday’s missive finds the former FX trader reminding us that he “turned bearish US equities on March 8.” Actually, Cudmore has “turned bearish” only to “turn” back bullish on any number of occasions this year. Through it all, he’s generally maintained an upbeat outlook on the long-term prospects for the global economy.

This morning is really no different. Like everyone else, he’s a bit incredulous at the extent to which equities are a sacred cow. Simply put, the broad market just refuses to roll over despite a laundry list of concerns – most of which are geopolitical. I mean if nuclear war doesn’t trigger a correction, then it’s difficult to say what will.

Anyway, read Cudmore’s latest below to start your week.

Via Bloomberg

Bearish traders are finding this market exhausting — which makes it even less likely that the U.S. equity correction extends too far.

  • The beauty and pain of trading is that your P&L tells all. When you’re making money, good fortune is significantly underappreciated. When you’re losing money, no justification is deemed sufficient — your job is to manage the risks, including horrendous unexplainable moves
  • Strategists have the luxury of predicting an asset to move from A to B without needing to navigate the mental stress of the path that might be followed. The flipside is that this means they can often overlook the messages the market delivers via price action
  • In this column, I turned bearish U.S. equities on the 8th March. They have clearly fallen since then but it would be remiss to celebrate this as a particularly successful call. I’m fully aware that, as a trader, I would have lost money trying to play this retracement in stocks, given the ratio of short-term volatility to total ground covered
  • Despite a Fed rate hike, a confluence of geopolitical risks, a correction in commodity prices, high profile policy setbacks in the U.S., the failure of most 2017 consensus trades and disappointing hard economic data, U.S. equities are not finding the path lower an easy one
  • Even as a structural bull on the global economy, I had bought into the idea that a healthy correction was needed after such an extended period of low volatility. On most measures, it was hard to see prices as cheap while complacency seemed to abound
  • However, traders would highlight that there’s been little sign so far of over-leveraged longs on the verge of panicking. Meanwhile, the global growth outlook continues to improve, liquidity remains abundant and tail-risks of U.S.- China trade wars have now almost vanished
  • Momentum remains negative and down should still be the direction of choice for U.S. stocks in the short-term, but those bears with skin in the game will be feeling a lot less greedy on their targets for the pullback. Bearish strategists should take note
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