On Monday we discussed how our Psychology Composite moved to its most bullish position of P1 and what implications that has for our current market outlook. We also took a look at the charts of a few of our short-term indicators and compared their current levels to recent significant turning points. If you missed that post, you can read it by clicking here.
At this point, that's our bottom line, but today, I want to take a look at one data point that I guess the "dooms-dayers" are refusing to see. There is a HUGE focus right now on the headline problems, especially the European mess. But the old adage (that still applies) is that "when the US catches a cold, the rest of the world catches the flu." So logic says that when the US is starting to scratch and crawl out of the worst recession since at least 1980, maybe the rest of the world will also start to see better signs in its wake, but I guess that we'll have to wait and see if there's any truth in that logic.
I really like the graphic below from Calculated Risk that shows a map of the US and every state's rate of growth in the last three months.
Click on the graphic to view a larger image. Click here to view the source.
The very green map above is a very good sign, and hopefully we will continue to see improvement in this indicator in the months to come.
But back to the stock market...if our Psychology Composite continues to be as accurate as it has in the past, and if our analogy of this correction to that one of 2010 is on target, then we believe that this bull market should be ready to rock and roll again in the next few weeks.
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