'Summer of Mud' for Markets Declared by NewEdge's Dawson

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00:00Cameron Dawson of New Edge Wealth writing, the market has shown signs of resilience as it burns

00:04the overbought condition for mid-May. We think the pain trade is still higher. Cameron joins us

00:10now. And Cameron, it is so good to have you. Thank you for being here. A lot of people agree with

00:15you. And that's what we saw from Max Kettner this morning, where he said, recent dips and risk

00:19assets have been very short-lived amid less supportive news flow. Our sentiment and positioning

00:23indicators are still flashing buy signals. We still come back to that positioning indicator

00:28from Deutsche Bank consolidated positioning, which shows that we're still just in the 23rd percentile.

00:33So despite a nearly 20% move, you still have so many people sitting on the sidelines. Now,

00:38that's important to note. It's institutions sitting on the sidelines, mostly the systematic traders.

00:43It's the lowest numbers in things like the CTAs, as well as algorithmic traders,

00:48whereas you see the discretionary traders have gone a little bit more all in, as well as retail.

00:53Retail has definitely been buying the dip, and that's where we've seen the greatest flows into

00:57this market. So because you still have people sitting on the sidelines, though,

01:00we do think that it comes down to the pain trade being higher.

01:04Does it matter that we don't have a trade deal, that the budget is being negotiated? Do any of

01:08these things that I open the show with matter?

01:11Yeah, we do think that they matter, and we're calling this the summer of mud. So it's a lot less

01:16exciting than hot girl summer or brat summer. It means that we're just...

01:20You're crushing it, by the way. Carry on.

01:21It means that we're just stuck in this muddle through, which means that from a policy perspective,

01:26we don't see a lot of things that are ultimately stimulative. We think that even if you do see

01:31the pain trade be higher, you still have valuations that are rather high, earnings estimates that have

01:36room to come down. So we still think that we're stuck in this sideways choppy range, a really muddy

01:41outlook from a growth perspective. So the summer of mud is what we get.