Market Pullback Ahead?

Sam Stovall, the well respected chief strategist at S&P Capital IQ, was on Yahoo Finance's Breakout segment and pronounced that stock market will likely have a 5-10% modest pullback.

"You're better off watching for a tsunami than you are an earthquake because the lack of volatility usually indicates that it's a matter of when, not if, we're going to have a market decline of 5% or more," says Sam Stovall, the chief equity strategist at S&P Capital IQ, in the attached video. The good news, however, is that although we're overdue for a shakeup, he says "I don't think it's going to turn into a bear market."

He says, a check of economic, monetary, sentiment, earnings and more all suggest a shallower, more subtle pullback is in store, rather than something more sinister.

Thus, Mr. Stoval joins a chorus of pundits calling for a modest decline including Liz Ann Sonders of Charles Schwab, who stands out for her modesty and composure among the pantheon of market prognosticators who clamor for your attention. Here is what she wrote:

Headwinds have reemerged and investor concern is heightened yet again. We still believe stocks can run further, but a pullback is more likely in the near-term. 

My investment experience is perhaps modest compared to some of the strategists out there. It did however encompass 20 years, including both bull and bear markets. I have come to believe that a pullback of 5-10% can happen anytime in the stock market. Those of us in the market long enough knows how difficult it is to predict future movements. However clairvoyant we may be, we have all been wrong so often that we start to speak of Mr. Market in personified and reverential terms as if it is the embodiment of wisdom. However, even those who profess such respects for the market can not constrain their desires to know her evanescent whimsy. If the market is to have a pullback and only to reverse course in short order, who are then the suckers selling into such ephemeral doldrums? It is difficult enough to predict a downturn, but to predict a downturn and a reversal seem to me have crossed some kind of boundary of modesty.