Energizer Bunny Breaks Loose – December Commentary

The Energizer Bunny is the marketing icon and mascot of Energizer brand batteries in North America.  It is a pink mechanical toy rabbit wearing sunglasses and blue and black striped flip-flops that beats a bass drum bearing the Energizer logo.  The Energizer Bunny advertising tagline is brilliant, “Keeps going and going…”  When used as a synonym to describe a person or other object, it means a person who seems to have limitless energy and endurance.  Is it appropriate to characterize the stock market rally since March 23 as being like the Energizer Bunny?  It appears everything is breaking out.  Market strategists indicate this is the broadest rally, both domestic and geographically, since 2013.  93% of the stocks making up the S&P500 are above their 200-day moving average (trend line of the last 200 days).  That’s a top decile reading historically.  The high reading suggests the market is overbought (high enthusiasm; more on this below), but in fact bodes well for 12-month forward returns being positive.  The current market rally “keeps going and going…”

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