Expect a Bumpy Ride for Remainder of 2017

The latest E-Mini S&P tout (see below) sounds a cautionary note, since the December contract has been laboring without success for a month to make headway. If bulls significantly alter the picture in the coming weeks, it wouldn’t be the first time they have emerged from a coma to punch through supply and send the broad averages rocketing to new all-time highs.  But with sensational Q3 earnings already discounted, investors will be increasingly dependent on the “global economic boom” narrative to maintain their spirits. The supposed boom is not nearly so robust as the Wall Street Journal et al. would have us believe, although there is probably something to it (enough, for sure, to send Boeing shares into a vertical parabola).  But the boom-times story is still fragile and somewhat lacking in credibility. That means investors are going to wince at any headline or news development that casts doubt on Wall Street’s — and the Fed’s — lollipops-and-roses scenario. Under the circumstances, bulls and bears alike should expect a very bumpy ride between now and 2018.