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 | | Robert Ross
Speculative Assets Specialist | The S&P 500 is up 70% from the October 2022 lows...over 170% since March 2020. Yet, many investors aren't willing to put new money to work. They fret over tariffs, stubborn inflation, and mercurial politics. I think these concerns, while valid, are overblown. Some people might label me a "permabull," like Fundstrat's Tom Lee. After all, I've been bullish since the bottom in 2022. In reality, I'm just following the data. And the numbers suggest everything is still running smoothly. But before we dig into the details, let me walk you through my analytical framework. My 3 Pillars There are thousands of different ways you can slice and view data. I find that they all fall into three categories: - Fundamentals: Earnings growth, demographics, and monetary policy.
- Technicals: Finding the "primary trend" for the broader market.
- Sentiment: Fading what the prevailing investing community is thinking.
Let's take the run from 2022 as an example. Markets rose as global central banks stayed dovish. At the same time, the AI boom kicked into high gear. Plus, we had favorable demographics. Meanwhile, the primary bull trend held across multiple asset classes. Yet, while sentiment was positive, it never got exuberant. This dynamic created a healthy environment for stocks to continue higher. But what about now? Why You Need to Stay Bullish U.S. Stocks Right now, the S&P 500's key companies - the Magnificent 7 - reported good but not great earnings in the latest quarter. On the demographic side, the Millennial generation is entering their peak earnings years when they make big purchases like houses, cars, etc. And the Baby Boom generation is retiring and spending their hard-earned savings. On the technical side, the S&P 500 is in a strong primary uptrend with a rising 200-day moving average and breaking out to new highs. This implies the primary trend for "the market" is up. 
View larger image These two factors alone would be enough for me to be cautiously optimistic. But when I see what's going on with market sentiment, I get ferociously bullish. Why It's Time to Be Bullish (and Contrarian) Here's where it gets interesting. I'm not just bullish because the fundamentals are solid, and the technicals are strong. I'm bullish because sentiment is telling me it's time to be. And that's often where the best opportunities lie. Right now, sentiment is one of the most critical indicators to pay attention to. Skepticism fills every corner of the market. Yes, stocks keep rising. But, many investors still can't shake the feelings of doubt. A recent headline from the Wall Street Journal captured this perfectly: "Investors Haven't Been This Pessimistic About Stocks Since 2023." You might be wondering: why would I get excited about pessimism? Doesn't pessimism mean bad news for stocks? 
View larger image Here's the thing... When everyone is fearful, that's when it's time to be greedy. It's the classic contrarian play - buying when everyone else is selling. In 2023, sentiment was largely negative despite the S&P 500's 20% gain. And do you know what happened? That's when I knew the market had room to run higher. We're seeing the same sentiment setup play out now, which is why I'm confidently sticking to my bullish stance. Bullish Sentiment vs. Bearish Expectations The current market may seem like it's due for a breather. But I'm not convinced. Bull markets don't die of old age; they die when there's no one left to buy. Based on my current sentiment analysis, I don't think we're anywhere near that point. There's still room for growth. You can apply this logic to crypto as well. I was one of the lone voices telling people to buy Bitcoin and high-quality cryptocurrencies in early 2023. This was an incredible call, as Bitcoin has been up over 250% since then. While my analysis shows there's still more upside, the easy money has certainly been made. Ready for Round 2? We've had a great run over the past couple of years in both stocks and crypto. But I believe we're just getting started. Stay focused on your long-term goals. Keep an eye on the fundamentals. Trust the technicals. And pay attention to sentiment. These elements will guide you through volatile times and put you in the best position for continued success. Stay disciplined and patient, Robert Want more content like this? | | | | | | 
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