Phew... the bulls who missed calling the slowdown appear to be back with the re-acceleration call!
Remember, the Federal Reserve hasn't proactively predicted a recession in the last 20 years. Meanwhile. Old Wall consensus (i.e. strategists who love to call bottoms in stocks and predict "face-ripping" rallies) missed the last three U.S. economic cycle peaks (2000, 2007 and 2015).
Here's analysis on volatility from Hedgeye CEO Keith McCullough in a note sent to subscribers this morning:
"We really did need sentiment to pivot back to bullish (positioning was bullish until we hit the FEB lows, then they sold the lows – then the squeeze); that said the bullish TREND in equity volatility has a risk range of 15-30, and now we’re at 17 – next big move = up"
What does this mean for equity markets?
"While I’ve been bearish on the Russell 2000 (and SP500) since July, we’ve had some massive opportunities to underweight, sell, short, etc. Small Cap (SIZE) as a style factor at obvious lower-highs (from the all-time bubble high of 1295); now = another one of those opportunities with immediate-term down side to 991 – Costco comps of 0% is not “an economy that appears to be picking up.”
In other words, it's fine if you want to believe Old Wall storytelling that "the bottom is in." But remember all stories come to an end.