Year End Market Call And Has The Market Reached A Bottom? Tommy Lackey, Managing Partner at Relativity Capital Advisors
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Tommy Lackey, managing partner and portfolio manager at Relativity Capital Advisors, Power-investing.com
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Tommy Lackey, managing partner and portfolio manager at Relativity Capital Advisors, Power-investing.com
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00:00 I want to know that Tommy Lackey crystal ball here because we give a lot of guest props,
00:04 but I mean, you got this right.
00:05 You came on and like, I think it was December or January and said, you saw that we could
00:09 see, you know, a strong first half and you thought maybe a weaker second half, which
00:13 nobody was saying.
00:14 Everybody's like, oh, where are you going in a recession?
00:16 You know, or they were saying, you know, it's just going to go, you know, we're going to
00:19 come back.
00:20 But nobody had this like week first or a strong first half, week, second half, like you had.
00:25 It's a great call there, Tommy.
00:27 Hop into, you know, this overall Merck and what you're seeing here now, like give us,
00:30 you know, your next call as we enter the final couple months of the year.
00:34 Well, I think what you said is exactly right.
00:37 I mean, it's the toughest spot we've seen ourselves in in a while.
00:40 There is a lot of heavy selling.
00:42 There's a lot of ugly charts.
00:43 There's a lot of things like that.
00:45 And as a technician, the last thing I really want to see is ugly charts.
00:47 But at the same time, as y'all know, that's one of the main reasons I followed Brett in
00:52 situations like that, that I follow it more from a standpoint of not really what to follow.
00:57 But when you start getting to the washout levels that are basically the baby with the
01:03 bathwater type analogies that are out there.
01:06 And I do believe that we have a good opportunity that we're getting there based on some good
01:11 technical levels that we've either just breached.
01:13 And again, that's one of the things, the best technicians I've ever learned from and followed
01:18 all that.
01:19 They don't look as much at a hard line as they look at where is it three days later
01:24 and maybe two to 3% from that level.
01:28 Because breaking a line or breaking a particular point on a chart is easy to do.
01:33 Zones are more important and looking more at kind of what the overall backdrop is.
01:38 And I think you're right.
01:39 I think people have gotten really bearish.
01:42 And I think they've had good reason to for the last few weeks.
01:45 I think this has been a good bit more precipitous than I thought it would be, but has been driven
01:49 a lot by TLT and its drop as well, which again, no matter what the Fed does today, which I
01:56 severely doubt they'll raise, it doesn't seem to me that would be a very smart thing to
02:00 do at all right now.
02:02 But at the same time, if they do either way, I think you've been setting up over the last
02:07 week with some improved breath, some improved things under the surface.
02:11 It's really, as they say, it's really been the generals that have been really taken to
02:14 the woodshed this week.
02:17 And those are the ones that are really starting to, yeah, sure, we have the pay calm and that
02:21 kind of stuff.
02:22 But when you start seeing things like Tesla and NVIDIA and some of these guys breaking
02:26 heavy support levels, again, everybody's looking for that to be the start of something huge.
02:31 And a lot of times that's kind of the end of it.
02:35 So what do you think for the last, like we're going into the seasonally strong period for
02:40 the markets, Ryan Dietrich, you know, we've had him on the show, you know, Ryan well,
02:44 and he was saying typically the markets bottom October 27th, October 28th.
02:48 I mean, holy cow, I'm looking at my calendar.
02:51 I'm looking what the market has done since literally three days ago.
02:54 And I'm like, could Ryan Dietrich be right?
02:56 Could he have called it on the day October 27th?
02:59 Could that be the bottom here in this market?
03:01 Well, this is one of the things I love about listening to you all.
03:04 And you were saying it just a minute ago on the Ackman bottom and this bottom and that
03:08 bottom.
03:09 And I know you all are being playful in a lot of ways.
03:10 A little bit.
03:11 But at the same time, again, it's the what's happening for the next week or so around those
03:17 things.
03:18 It's not a day thing.
03:19 And it's the same things like everybody expects when you come off the bottom.
03:22 If I've been saying this bottom is not necessarily good or strong or whatever, because we don't
03:26 have heavy volume.
03:28 You don't have heavy volume off the bottom because people are scared.
03:32 So the idea of saying that and that myth living for my entire career, and I still heard it
03:40 this week.
03:41 Oh, the bottom volume is still terrible.
03:44 And I don't disagree.
03:46 But you don't get volume until people start to buy in, not just physically with money,
03:51 but mentally.
03:52 And we're not there two days in.
03:54 And I think that's something you have to respect.
03:56 I agree with you completely.
03:57 If we do find a seasonal bottom here, I don't know whether it's the bottom or not.
04:02 But I've been talking with you guys for over a decade now about the fact is more information
04:07 out of the balance after a drop than we do out of the drop itself.
04:12 Who engages?
04:14 How much money comes back in?
04:16 Where does that money go from a rotation standpoint?
04:19 Is it defensive or is it more cyclical?
04:22 Those types of things are going to give us a much better answer than what we saw the
04:26 last week and a half as we get to, you know, people talk about the rubber band stretching.
04:31 We may not be there.
04:33 I may be wrong.
04:34 But usually when we get there, our band stretches, you get to a point of reflexivity to where
04:40 even if you do have a precipitous drop for a week or so, that is almost always zeroed
04:46 back out within the next couple of weeks.
04:49 And then the decision is made.
04:51 Are we going to go back up?
04:52 Are we going to keep going down?
04:53 It's usually not that spike that lasts very long.