Investor Psychology Improves to a More Bullish Level

The weight of the evidence is overwhelming!  I can give you a gazillion words, and you know from experience that my verbiage does get carried away sometimes, but today, I cannot come close to competing with the image that our Asset Alloation Model is painting. 

Today, we are once again seeing the skeptics warning us of a "soft patch" in the economy.  Yes, these are the same skeptics that were warning us of a "double-dip" recession just a year ago.  However, today we have seen an important improvement in investor psychology, that in conjunction with the very bullish readings of our Monetary and Valuation Composites, excites us about the future of this stock market.

So now, we have this combination.

This is a very powerful set of underlying support for a continued bull market.  Check it our yourself.  Bull markets don't end UNTIL monetary conditions begin to weaken as the fuel for the bullish charge is pinched.  Yet today, monetary conditions are getting stronger and stronger.  Valuation is giving you more value for your dollar today than you were getting at the bottom of the bear market in 2002.  And today, the "Wall of Worry" - the prevailing Psychology - has just been reinforced.

There is ALWAYS a risk.  There is NO GUARANTEE!! But we always have our safety net just in case.  That safety net - our Market Trend Analyzer - is still solidly in the Investment Phase of this bull market, which you can see in the chart below.

Click to view larger image.

So just ask yourself, "Do you trust the indicators?"

That is our message for today.  We have been waiting on this correction for a few months now, and today, our Asset Allocation Model is telling us loud and clear that this is an outstanding buying opportunity for investors.

To view today's complete Market Comment, click here.

Don Hays

Please see important disclosures at the bottom of this page.