Likely Near-Term Pullback Should Present A Buying Opportunity | Mark Newton, Fundstrat

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**Mark Newton** (1:00)
Well, I think the next two months are going to be a lot choppier. And I do sense that we could have a 5%, maybe 10%, but I think at least 5% move probably starts in October into November. At that time, I think you do want to buy dips, and I think the market likely goes higher into year end, if not, probably the middle part of January. I do suspect that heading into next year, if we finish on a high note, that we probably will have a first year correction.

**Adam Taggart** (1:35)
Welcome to Thoughtful Money. I'm its founder and your host, Adam Taggart. When today's guest was last on this program back in May, he made the bold prediction that new all-time highs for the stock market were just weeks away. And he was right. And since then, markets have continued powering higher, trading at a new all-time high the day of this recording. So, is he still bullish on the market's prospects for the remainder of the year? To find out, we're fortunate to welcome back to the program, Mark Newton, head of technical strategy at market research firm Fundstrat, where he works with its founder, Tom Lee. Mark, thanks so much for joining us today.

**Mark Newton** (2:13)
Thank you for having me back, Adam. Great to be here.

**Adam Taggart** (2:15)
Thank you. Well, look, first and foremost, congratulations on the correct call that I just mentioned there in the intro. At the time, wasn't a crowded call. And you kind of stuck your neck out there based on your technicals. You're a big technical guy and you were proven right. So I want to give credit where credits do.

**Mark Newton** (2:37)
Great. Thank you.

**Adam Taggart** (2:38)
All right. I get a number of questions for you, but I'm just going to start with the money one, which is, as I mentioned, you're a technician. Last time we talked, I really got from you that you take macro into account. You think about all this stuff. But really, at the end of the day, you just do what the market technicals are telling you to do. So, what are your latest technicals telling you in this market?

**Mark Newton** (3:03)
It's been an interesting month or two, I would say, for the US stock market. Looking at the market back in April, and really in May when we spoke, there was still rampant signs of fear. The fact that technology had come back with a vengeance really gave a lot of confidence to the idea that market should start to turn higher. I mean, sentiment at that time had gotten almost as bearish as what we saw at the 2022 low, as well as at the COVID low back in March of 2020
Going back, it would be almost 2002, 2003 There's only a couple of times in the last 20 years where sentiment had truly gotten that negative. Fast forward to today, sentiment has improved ever so slightly, but still largely neutral and arguably still not as optimistic as what many would want to see to think there's going to be any major top right away.

**Adam Taggart** (4:01)
Sorry, Mark, are you talking consumer sentiment like the UMich surveys? Are you talking investor sentiment? What do you look at?

**Mark Newton** (4:07)
I look at a combination of those. Obviously, we've done some studies on the UMich survey, and when you look at consumer sentiment, there is some political bias to that, and that has been pretty chronically negative compared to how it looks over the last 20 years. But I look at a combination of several things on the retail side, like American Association for Investors Intelligence, AI, I think is interesting at extremes. I think the fear and greed poll is very good. I look at the slope of the VIX curve. I always want to look on the institutional side for what the CTA exposure and some of the, really the short interest as a percentage of open interest. What's happening with Bank of America portfolio manager surveys. I look at a JP Morgan poll. I try to put it all together. And just also looking at options skew. And so, I don't see evidence of rampant speculation right now and or evidence of real froth with regards to sentiment. I think that obviously under this administration, there's sort of a new ball game with regards to how we view sentiment. I think a lot of people remain largely pretty guarded and fearful of tariffs and what's going to happen to inflation. I think a lot of that really has not mattered to earnings nor economic data. You could argue that potentially the economy is starting to show evidence of rolling over ever so slightly on the fringes. Obviously, the labor market has been weakening of late. People have stopped hiring, but yet we don't see mass layoffs. The data today on continuing claims and jobless claims was actually pretty encouraging. I would have to argue, and the Fed obviously has still indicated they're set to really cut into this economy, to the tune of about four cuts by next summer.