- Growth has picked up in the US suggesting a possible positive tail-wind for the US stock market.
- The Dow Jones Industrial and Global Dow Jones indices are in positive trends and remain on buy signals.
- Short-term measures of market internal strength are suggestive of a continued rally.
- The top ranked asset classes on a relative strength basis are those most sensitive to economic growth.
- Commodity prices are the weakest asset class, suggesting that reflation may have peaked.
- The Dow Transports is currently on a sell signal and is showing a negative divergence.
- Long-term measures of market internal strength suggest a cautious positioning.
- Continued Federal Reserve tightening could accelerate the flattening of the yield curve, indicative of a late cycle environment.
- The Market is now in one of the most overvalued, euphoric markets, ever witnessed.
What Should We Do?...
- Follow the trend and stay with the momentum of the market.
- Allocate assets wisely and use diversifying strategies.
- Keep some cash.
Enjoy it while it lasts.