Caution is the rule and complacency is the danger, says Hightower's Michael Farr

Joining us now to help dissect last week’s downturn, Michael Farr, Chief Investment Strategist with Hightower Advisors, CEO and founder of Farm Miller in Washington, also a CNBC contributor and one of the longest serving ones of all, if not the Michael Farr, welcome. Good to see you. You say the markets may be due for a bounce. What tells you that? And to the minute, when will it happen? I OK. To the minute, I think it’s happened. Tyler, thank you very much. I usually never answer that question with a straight answer, but it does seem that we followed a pattern last week that started out again today. Futures were a little bit higher, they couldn’t sustain any strength. And every day followed the same pattern where stocks just traded lower and lower and lower. A little bit of strength in the morning lower showed that again this morning. They did indeed move lower. And then they found support technically and have risen higher. I’ve got to tell you, Mike Santoli in his weekend article absolutely nailed it. One of the best articles I’ve found in a long time. He just, he’s so good. This guy is so good. But I, I, I commend this article to everybody. They should really read it. Mike’s line was the work of a pullback in a bull market is to unwind over aggressive positioning, drain excess optimism, reset, reset expectations and take prices down to meet fundamental buyers convictions. That’s what I think we’ve seen so far. So we’ve had a pullback in a bull market. Have the fundamental buyers came in, We need to see another day or two, but certainly a bit of a bounce here. We could revert, but this is the bounce you look for at least to put us to the end of those six days, Tyler. And yet you think the fact that there’s a bounce does not necessarily mean that there is an another leg higher in this bull market, right Or or what should my interpretation be? Yeah, absolutely. So what happens now on a technical basis is the stock prices will have some rally and we’ll see if this is sustainable. We’ve reached an oversold condition and now we’re going to see if this bounce back is sustainable. The Feds in a quiet period, I think you probably get a little more strength out of all of these earnings calls this week. And then it’ll be back to the Fed. We’ve been through this same pattern with the Federal Reserve, where the Federal Reserve and FOMC has said we’re going to be data dependent and we’re going to be really cautious until we see the real whites of inflation’s eyes. The markets created its own narrative of six or seven eases this year. the Fed never endorsed that. And when the market narrative runs into the Feds actual actions, there’s been disappointment and trade downs after the Feds meeting. We’ll see if that happens again. If J Powell Spooks the markets after the next Fed meeting again and says it’s going to be longer before we see a rate cut, I think maybe you see a renewed sort of pull back and fall in prices again. OK, So if all of that is the case, I mean, here you’re quoting Mike Santoli. I’m going to quote you. Cowards live a long time and nobody ever went broke taking a profit. Are you suggesting right now is the time to be cautious, keep your money in a money market And and what about the the ultimate safe haven gold, which has just kept climbing? Cowards live a long time and I am the guy who typically lays up rather than takes the long shot over the water when I’m playing golf too. I I saved my golf balls that way. I saved my money this way. Prices are still very high. There’s a lot of conflict in the world. We’re still near all time highs. There are a lot of outsized positions. It never is a problem to trim some of those. You don’t want to take capital gains for no reason. So you do have to be cautious. But the old line that you sell in May and go away, well, how about raise a little bit, take some profits if you have them in these outsized positions. Do a RE evaluation here at the end of April. Safe never offends. I’d rather miss out on that last 10% to the upside, but for now the economy’s in good shape. Things are OK, but things in no way are cheap right now. Contessa. Even even after we’ve seen this bounce back today of 1 1/4%, I think caution is still is the rule and complacency is the danger.