Don’t fight the strong momentum of the market: Adam Kobeissi

All right, so our next guest, he's been bullish on the market all year long, in fact has a target of 5500. Joining me now, Kobesi letter editor in chief, Adam. Kobesi and Adam before, before we update the various asset groups. I, I do, I, I read where you were getting excited about this market and what caught my attention. He said in part because of risk appetite and bullish sentiment with what's interesting to me, of course, bullish sentiments surged for retail investors last week. When they And then when they when they ask about the factors that most influence their outlook, they overwhelmingly pick the economy and inflation. You know, we know traditional Wall Street says when there's too much optimism out there, it's particularly retail. It's time to head for the hills. You're not in that camp, are you? No, I mean, we haven't been in that camp all year. And I feel like that argument could have been made ever since October low. And I think our view has been more so that right now you don't fight this momentum and never pays to fight a trend this strong. And even if you, you know, nail the top one out of 20 times, those other 19 times you're missing out on a pretty huge run. And look, we've said regardless of what the Fed is going to do, stocks are heading higher. Last week we raised our target to 5500. We're almost there today. We're probably going to raise our target again. And I think that right now there's, it's a great market to just be bullish of stocks, You know, obviously hedge and manage your risk. But in the mean meantime, trade other things going on in the background. I mean, commodities are flying from from bullish to bearish back to bullish along with Fed expectations, bond markets, I think there's a lot more to train to those other things kind of bullish in the background of equities. Let me get back, I'm going to get more specific with those individual assets. But I want to ask you though, because you talked about the risk, right? Risk of, you know, the risk appetite is huge. And we know, of course, the greater the risk, the potentially the greater the rewards, but also works on the other side. And a couple of guests today really seem a little anxious about all of this. What's the risk of something happening out of left field like when everyone's getting too excited? Does that worry you a little bit? I think that's always, you know, you don't want to move with the herd, right? And you want to be, you want to always be kind of attentive to getting into a crowded trade. But at the same time, I think it's pretty easy if you're trading on a technical basis to kind of determine when the trend is starting to shift. Right now we're making higher highs and higher lows where you know, the most recent higher lows at 5400 below that was around 5350 50. If you're trading above those higher lows and just keep pushing higher, it's clear the trend is going up. Now will will you lose out on the first few percentages if the if you're long and the and the trend reverses? Yeah. But I think that's also just on a risk reward basis. You're better off riding the trend for now until it until it shifts. And that's what we do for our subscribers. We put out daily levels and research into saying this is where the trend is. The trend is still intact. And if it flips, we're we're more than happy to trade to the downside as well. So you have the same reasoning for taking profits and gold, crude oil in bonds. What's that? So we've been trading this, we call it the Fed pendulum where it, it swings from extreme dovish sentiment to extreme hawkish sentiment and then back. It never really stops in the middle. It just keeps on swinging and I think we went, so we start off the year with six cuts priced in, which was extreme dovishness. Then we kind of went back to very harsh expectations for a week that we had zero rate cuts priced in and rate hikes were actually coming back on the table for 2024. Now we're at 2 with a rising 20 to 30% chance of 1/3 cut this year. Sorry, not hike cut and the Fed just guided 1 cut. So I think market expectations are becoming too dovish again. And I think that means that the the US dollar index is going to rise. That means weakness for gold, for oil and as as well as weakness for bonds after a pretty solid bounce in TLT, which we were long of, as I mentioned that the last time I was on the show. All right. Hey, Adam, great stuff. Always a pleasure to have you on, my man. Look forward to getting you in studio soon. Sounds good. Yeah. I'll be in New York soon. Absolutely. See you then.

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