This remarkably resilient market is closely following the post-election path I calculated in April. The rally goes on despite going more than a year without a 5-percent dip, strange headlines, central bank policy changes and the largest (-20%) underweight allocation by top managers since 2008. Is it really that bad? Can this rally continue?
Chart 1: The current market rally is closely following the average of the historical performance during administrations identified in the chart. The market has shrugged off headline risk and central bank actions during its ascent. An separate calculation shows that there is a 78% chance of positive second-half returns.