Everything screams we are in a aging but normal bull market that still has life to it. Sentiment is not high, and in fact pessimism has crept up recently. We had a very normal consolidation and segment realignment. Out of the high flying tech. It is a normal event to consolidate after hitting new highs. in fact the shallow, but daily whipping action is normal and expected.
Let the market data tell you what is going on, instead of emotional bias. The key, as I have reiterated for a while, is bond yields. That usually tells me if the future direction is one of economic acceleration or not, barring special events. the 10 year, while a bit premature, appears to be breaking out of its doldrums. It could go as high as 3.5 percent before a much needed correction happens. 1 to 2 months should put us there. DOW can go 1500 points higher.
Gold is reacting badly which suggests we are not at any terminal point in stocks.
Watch inflation talk start taking center stage in one months time.
