Last week, much to the surprise of bulls and bears alike, Morgan Stanley's in-house permabear jumped on the Michael Hartnett bandwagon, and just days after the uber-bearish Bank of America strategist predicted that stocks will see a post-Halloween meltup (if only to tumble right back down to fresh bear market lows at which point the Fed finally fully panics and capitulates, starting the next bull market), Wilson also made a tactically bearish call for US stocks, forecasting a rally that could push the S&P as high as 4,150.
In his latest Weekly Warm-up note titled "A Good Start as Stocks Rally in the Face of Doubt and Higher Rates" (available to pro subs here), Wilson writes that his call "was met with doubt from clients", which he views as a signal that "there is still upside as we transition from Fire to Ice—falling inflation expectations can lead to lower rates and higher stock prices in the absence of capitulation from companies on 2023 EPS guidance."
In short, Wilson is doubling down on his shift away from uber-bear to not just tactical bull, but full-blown bull, a transformation predicated by Morgan Stanley's house view that both yields and the dollar have peaked. Of course, if that is indeed the case, then with both yields and dollar sliding, it's virtually inevitable that the bear market ends somewhere here, because even as earnings slide, PE multiples start expanding again. Of course, Wilson won't admit any of that just yet (keep an eye on his tone in coming weeks) and instead when sharing his feedback to last week's notable call as well as color on where Wilson thinks the markets will trade from here, he writes what we first noted more than two weeks ago, namely that the meltup is all in the technicals: