It has been a while since our last post when we opted for a bullish stance based on the rapid improvement in our sentiment models. Those very same model along with our proprietary valuation model are rapidly moving to the same position they were in mid January, not a good thing.
In addition, our cycle analysis is predicting an intermediate term market peak soon. Impossible to say exactly when with any degree of accuracy but probably within a month.
Its my estimation that based upon our indicators any gains made in the near term will be given back within 1-2 months. The momentum has been extraordinary but at the same time we detect a shift in equity price leadership as we’ve not had the traction in gains as we had last year, this is typical market evolution. So, raising some cash here in preparation for future hedging will do us good longer term as we need to comply with the emerging new leadership. Leadership appears to be in the form of high quality large cap stocks, names recognizable to most everyone.
Be careful out there,
Brad