Dana Lyons – A Moderately Defensive Broad Market Outlook, Continued Rotation Into Value Sectors, And Looking Abroad To Europe
Dana Lyons, Fund Manager and Editor of The Lyons Share Pro, joins us to share what factors are having him continue to take a moderately defensive posture in the broader US general equities in the near-term, having gone short some sectors back in December, and pointing out the rotation of some funds from growth into value in this latest corrective move in the weighted indexes. We also get into some of the capital flows overseas into European stocks.
Dana shares insights on market internals like breadth, sentiment indicators like the put-call spreads, investing flows into inverse ETFS, and survey and the trends in the underlying term structure in vehicles like the VIX. His models have not signaled the bottom is in yet, but these choppy market movements could be getting closer to a period where they will start looking for a bottoming and turn if things accelerate further the downside in the near-term. In the medium-term Dana still sees the potential for one more blow-off top move in US equities, and then in the longer-term a more structural bear market that will work off the excesses of the last 15 years of bullish market action to very high valuations and participation.
Next we got into how some of the value sectors like utilities, financials, consumer staples, bonds, and gold have been getting some capital inflows, possibly as the growth and tech sector has cooled off over the last few months. Dana notes that this situation may not persist, and their models don't show that the bull market in growth stocks is finished yet, but stresses the importance of considering trades over different time frames.
We wrap up diving into some of the capital flows into European stocks, and if he believes it is just a trade or more sustainable. We also discuss other jurisdictions, notably some capital flows into Chinese markets, and Dana explains why they need more data first to know it is more than a just a contrarian speculation just because they were so oversold.
