When you look at the overall stock market, it is still stuck in neutral. Depending on which stocks you're looking at, the majority opinion still says that July is following the recent monthly up-and-down pattern. The bottom of the prior decline was on June 4th, and so far, July has been a slight downer. Each time we get our hopes up that the Psychology Composite might show the dumb investors getting more nervous and the smart investors getting more bullish, the stock market rallies, and so here we are, still stuck in neutral.
As you can see below, our Psychology Composite remains at P3. That is not bad; however, our preference would be a full correction from the P5 status of a few months ago to a very strong and short-term bullish P2 rating.
So until we see something different, we are still expecting the stock market to be stuck in neutral until we get a little more resolution on the political scenario for the upcoming elections. We included a chart in Friday's post that likens this year's market to that of 2004, and if this rhyme follows through, then this "neutral" pattern would last until about September. Here is that chart again in case you missed it on Friday.
Well, that's our message for this morning. Have a great week this week as you ponder the long-term view of what lies ahead.
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