The "Changing of the Guard" Continues

If you’ve read our recent Market Comments, you know we have a tremendous message for the future market performance.  Our Monetary Composite is at its most bullish state of M1, and over the last 50 years, this has been proven to be a tremendous bullish signal.  So, we’re not sitting here quaking in our boots about the next few weeks.  We most definitely have a strong wind at our back pushing this market along.  If that doesn’t float your boat, you also know our Valuation Composite is showing the S&P 500 to be 34% undervalued.  So, despite the herd (not really a herd, more like a small group meeting with the public missing in action) pushing our Psychology Composite into the P5 category, you can see how the underlying bullish power is dominating.

In these kinds of times, we like to look internally at some of the factors that help us to see the “changing of the guard.”  For over a year, we’ve had that dynamic return from the dead “bounce” off the March 2009 bottom.  But that was recoil action as some of the pillage in the bear market was overdone.  We then settled into what we believe was Phase I of the bull market.  There were outside political movements that affected some sectors at that time, and now that we’ve had the election, the sectors are once again providing a telling tale.

Don Hays

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