Passing the Baton
Should the baton be successfully passed from new era stocks to broader market plays, the contemporary bull market’s last medley leg may prove both exciting and profitable.
High school track relay races are comprised by a team of runners each ‘leading’ the team’s efforts in a different part of the race. For example, the 880-medley relay is comprised by two team members separately running a 220 and then passing the baton one final time for the anchor 440 leg. The success of the entire race depends on the performance of each individual ‘leader’ and on the efficacy of “Passing the Baton”!
The contemporary bull market reminds me of a medley race. The first three-year leg of this race has been ‘led’ by new era stocks which has the stock market off to a good start. New era stocks suffered a bit of stumble in late-2024 into the spring of 2025 before regaining their footing after the tariff presentation from the White House lawn by the President last April. However, most recently, these first leg runners have stumbled again and this time they look a bit gassed. Fortunately, the race appears to have entered the “Exchange Zone” -- the designated 20-meter zone, often with a 10-meter acceleration zone, where the baton must be passed to the next runner. Broader market stocks have been stretching on the infield in recent months and show signs of being ready to grab the baton and start the final leg of this bull medley.
