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Real Time Insight

The problem investors have been tackling for months is whether the market deserves to trade at new highs above S&P 1850, or if a significant correction is over-due.

 
What is quite possible is that the correction has already occurred in growth indexes like the Nasdaq and Russell 2000 and institutional investors have rebalanced to find the right blend of growth and value they want going forward.
 
If this assumption is correct, it could turn out that May is actually a month to buy this year, not sell.
 
Now you may also believe that the Nasdaq "correction" hasn't been that severe if you just look at the index dropping only 8% from its highs. But clearly that is the bulk of the big cap Nasdaq 100 holding up vs lots of smaller high-beta names that have been cut in half.
 
Here's a chart which illustrates the severity of the "correction in growth" this year...

 
So, my question of the day is whether or not we've seen enough "correcting" for the fundamental tailwinds -- and investor appetite for stocks -- to resume pushing the market to new highs in May.

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