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The implication from VLT Momentum is that bonds are sufficiently oversold (or, equivalently, that yields are sufficiently overbought) to trigger some degree of mean reversion over the next several months.

Sometimes we feel compelled to report findings that conflict with our outlook. And then there are the even rarer times we actually do it.

The Equal Weighted S&P 500 now trails the S&P 500 by 400 basis points YTD, and the rally is increasingly assailed as too narrow.

Stock market bears had a field day when the latest Investors Intelligence sentiment survey (Chart 1) saw the percentage of bullish newsletter writers spike to its “highest level since 1987.”

We don’t have a strong capitalization-bet recommendation, other than to remind readers that Small Caps have been especially responsive to the favorable seasonal window that began November 1st (and which extends through April 30th).

Bobby Knight thought coaching would be perfect “if it weren’t for those damned games.”

The last few months have served up some of the strongest readings observed during the U.S. economic expansion.

Record lows in implied volatility (VIX) have been analyzed ad infinitum throughout 2017, but the readings shouldn’t come as any surprise.

We remain bullish on stocks but with very limited visibility into 2018.

We don’t think the current stock market upleg is over.

The S&P 500, showing little concern for valuations or the political climate, had its best month of performance since February.

Growth stocks more than made up ground lost to Value in September. Dividing stocks by market cap, Growth segments are leading Value by spreads of 10-15% YTD.

This is the first time this year we’ve spent two consecutive months above the long-term median Small Cap premium of 3%.

The Up/Down Ratio sports a lofty reading of 2.08—the best “one-month” measurement since January of 2015. We’ve seen this movie before—strong initial readings have fallen apart in each of the last four quarters.

Info Tech, Consumer Discretionary, and Health Care are the top-three rated sectors; Energy, Utilities, and Telecom comprise the bottom of the ranks.

If the new tax plan gets passed, Corporate bond issuance will likely decrease while demand remains strong.

The range-bound interest rate action provides a friendly environment to earn the carry, through moderate duration and high grade credit exposure.

Our data shows the traditional Phillips Curve relationship between the unemployment rate and wage inflation still holds.

Homebuilding Stocks Are On A Stellar Run—Can The Streak Continue?

While this year’s rally has been a broad, “equal opportunity” affair, some of the weakest relative action we’ve observed has—oddly enough—been among equal-weighted stock market indexes. Equal-weighted indexes for Large, Mid, and Small Caps are all trailing their cap-weighted counterparts year-to-date, and the gap for the S&P 500 is now almost 400 basis points after an especially bad October.