I hear the screams of the bears getting louder these days. With each and every down session (or two), the narrative of ‘a bear market is coming’ without much hardened proof of such an event coming down. Oh sure, some day there will be a recession as we move back into a normal ‘boom/bust’ cycle, but for now that story is into the future.

Just this week I heard no less than four cries of foul, that a crash was coming. Newsflash: a crash HARDLY EVER comes via prediction. If the markets are pointing in that direction, then so be it.

The evidence points to strong economic growth, strong earnings (now and for the next few quarters), better tax laws and fewer regulations. Interest rates are still very low, the Fed is still accommodating, though they are pulling back on it very slowly.

There is a good chance we see 3% growth in 2018, exceeding the modest expectations of most economists and the Federal Reserve. Next year? Certainly might be a different story, but let’s just worry about 2018 for right now. The current situation is the story that needs to be heard and focused on, not what inevitably will be coming.

Bears will say ‘the collapse is coming’, but never with a date on it. Naturally, give a price or a date but never both. I suspect the desire to get in front or to be ‘first to the call’ to call it (a generational whatever!) creates some excitement, but think — if you were the boy who cried wolf, or thought the sky was falling — how much upside you miss out on waiting for it? The tragic stories throughout market history are endless. Don’t be one of those stories!

Yet, with tariff trade winds blowing in the direction of the bears, I can certainly buy the argument that economic growth could be weighed down, and that goes for global growth – not just in the US. Tariff policy has historically been a negative for the economy, if implemented this should be no different. In my opinion, it’s bad policy.

All fundamental evidence aside, I prefer to let the charts/technicals be a guide. They show where the smart money is coming to, and that smart money is the BIG money that moves markets. Even with the chatter from the bears about the markets about to fall apart, the charts show a constructively positive pattern and currently are in consolidation.

You can’t tell me that recent new highs in the Russell 2K and Nasdaq is bearish. That certainly isn’t the case to me, and while we got a bit over-extended, let’s give the bull case the benefit of the doubt. As for the SPX 500 and Dow Industrials, I will also do the same, there are higher lows on the chart (yes, on the Industrials even after being down eight consecutive sessions).

Let’s call the current state of markets the ‘pause to refresh’. Some names like Netflix and Google and have been white hot with price action this month. Money flows into stocks has been strong of late, and as we come upon the halfway point of 2018, we look for some leaders to emerge that will help push markets higher for the rest of the year.

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