Mike, I have reviewed a number of parameters (including the calendar, to make sure I did not miss the last part of July and all August so that we are now actually in the minimelt stage the turnips were forecasting for Sep/Oct), and frankly, I see no need to change the picture, the current sharper than expected interruption of the "summer rally" in my opinion will now enable the market to wait until putting the top to possibly as late as early Sep. My best bet is still a top (and not a Bull final top) around roughly the 20th or so of August. The last six trading days are not the way big bull markets end. They usually end with broad distribution tops, and here we are barely 6 days from a simultaneous top in the S&P, the Dow and the Naz, and we get more than 350 new lows and only 17 new highs of on the NYSE? That shows extreme pessimism, IMHO, and I do not think it is going to last.
The arguments for a strong market have not changed, low interest and excess liquidity. If I thought we are going into a recession and as a result we might have a budget deficit of $300 Billion or so, I would change my tune (since it would change the liquidity picture with the Feds competing for the free liquidity, and this will cause interest rates back well above 6.25%).
Zeev |
