The Pomp Podcast
Everyone Is Bearish And That’s Exactly Why You Should Buy | Ryan Detrick
- October weakness is historically normal and predictable; late October typically marks a market low before year-end rallies, with the strongest day of the year historically occurring on October 28th.
- Breadth is improving beneath headline weakness in tech; while large-cap technology has struggled, 300–400 stocks participated in gains last week, and equal-weight indices show strength similar to patterns seen during the dot-com bust.
- Record cash sitting on the sidelines (money market and cash ETF flows at all-time highs) is a contrarian bullish signal, as these surges historically correlate with market bottoms.
- Midterm election history shows the S&P 500 has risen in 19 of the last 19 instances one year after midterm elections, averaging 15% gains (nearly twice the typical one-year return), regardless of which party wins.
- Earnings growth remains strong globally, with 88% of early reporters beating on EPS, and forward 12-month earnings rising on small caps, mid-caps, and internationally; consumer spending remains solid across restaurants, recreation, and housing.
- AI and big tech spending risks exist (hyperscalers committing record capital for data centers), but valuations on NVIDIA and Amazon are at multi-year lows and justified by 30%+ earnings growth; the tech trade is not over, just consolidating.