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Replies to post #587279 on $Stock*Shop*Charts*News*Option$
07/17/17 10:13 AM
The sequence for the recent “bull leg” began when our short/intermediate models flipped positive the week before the presidential election. Regrettably, those same two models, wrong-footedly, called for caution around the end of January looking for a 5% - 10% pullback that never came. Fortunately, they flipped back to positive on April 19th, as chronicled in these reports, suggesting the equity markets were headed for new all-time highs. Last week those new all-time highs were achieved by many indices; and, the ones that didn’t make new highs came very close to doing so. Also within the bookends of the week came yet another Dow Theory “buy signal” as both the Industrials and Transports made new closing highs.
Meanwhile, we are about to celebrate the one-year anniversary of the start of the earnings-driven secular bull market. Recall, the earnings trough came in 2Q16 with earnings improving ever since; and depending on what source you use for 2Q17, earnings are expected to be up 6% to 8%. Moreover, there is a fairly good correlation between the two Purchasing Managers’ Indexes and S&P 500’s corporate revenues. Both of those indices were solid in June, implying that revenue growth should continue its upward trajectory as well. . .
