When most people hear the name “Fundstrat”, they think of Fundstrat’s managing partner Tom Lee. Tom Lee became finance-famous over the past two years for Fundstrat’s consistent accurate market calls.
In 2021, it was the “everything rally” — which in December of 2021, transformed into a stark warning of a “treacherous first half” in 2022. But behind these two impeccable predictions is a lesser-known name: Mark Newton, Fundstrat’s lead technician.
Fundstrat Calls for a Treacherous January
Compared to Tom Lee, Mark Newton is a relative dark horse in the finance world — but he deserves credit for his powerful (and often contrarian) market calls. When Fundstrat predicted a “treacherous” decline in early 2022, they got it almost immediately. Between January 22nd and January 27th, the VIX rallied from $21.32 to $37.21, and the S&P 500 entered an intraday correction.
Despite having the worst performance since January 2009 (and nearly the worst performance of any January, ever), Fundstrat CMT Mark Newton didn’t see this as an all-clear for the market. In fact, by February, Mark said that market sentiment had actually become even more bearish.
“It obviously has gotten a little bit more bearish [...] If anything, this recent choppiness has provided a bit more of uncertainty — but it's not truly that fearful yet. When you look at things like the equity put to call or fear and greed index, those haven't reached levels of true capitulation.”
We know in hindsight that this February call was accurate — the market continued to decline and chop around for months.
Mark Newton: “Smoke ‘em if you got ‘em”
In the same February interview, Mark Newton called investor attention to defensive stocks like Altria (MO), citing their strength amid the recent volatility. Asked by Yahoo! Finance reporter Karina Mitchell, “You say tobacco stocks are worth looking at. How come?”, Mark Newton responded:
“Well, that's one of the best acting groups of the entire week. As the saying goes, “smoke 'em if you got 'em”. When you look at some of the breakouts that are happening in Altria, it's just really an area that investors can hide during times of extreme volatility.”
Altria went on to soar 10% over the two months that followed the interview. Mark Newton would go on to cite additional stocks that investors could hide in during periods of extreme volatility, like Coca Cola (KO), which has outperformed the S&P 500 by more than 21% year-to-date.
Mark Newton Calls the June Market Bottom
A good Chartered Market Technician leaves their bullish or bearish bias at the door. On June 17th, that’s exactly what Mark Newton did with his previous bearish prediction. When Mark saw bearish sentiment reach a fever pitch, he made a contrarian prediction yet again (this time in the bullish direction) when he called for the bottom of the market’s selloff.
“When you look at things like the percentage of stocks above their 50-day moving averages, it is now down to 2%. [...] We have finally started to see some evidence of a little bit of VIX backwardation. [...] Any given year when the market is down 20%, the odds certainly are in your favor to try and take a stab at trying to buy for a rebound. [...] I have some cycles that suggest we’re going to bottom toward the end of June.”
Talk about spot-on: The Friday that Mark Newton gave that interview was the bottom of the S&P 500’s downtrend. Since then, the S&P 500 (^IN) rallied more than 18% off the lows before giving some back over the past week, begging the question:
Where is the S&P 500 Heading Next?
Mark Newton says that as the Summer rally is letting off steam, it’s likely to retest the $3,900 zone — but it isn’t time to run and hide. Mark says this time, investors should consider buying the dip before the market makes its next run, which Newton believes will take the S&P 500 to $4,400 by September.
Curious what sectors Mark Newton thinks could benefit the most from the next big rally? Ask him LIVE, next month, during Market Rebellion’s annual RebelCon. He’ll be in attendance, alongside Tom Lee, Bryn Talkington, Jon & Pete Najarian and the rest of our stacked lineup of experts! Can’t make it in person? Pick up your virtual ticket now to lock-in your spot before it’s gone!
