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weekly
update
Dow has more upside,
Europe consolidates, energy
bullish
20th May:
Gold
has pulled back to the top and turned.
A lower low would suggest that the
pullback has finished and the downtrend
will continue. The S&P 500 is close to
resistance but the Dow and the
Nasdaq have further to go before any major
obstacle. Energy is looking
bullish. Europe is consolidating, Hongkong
drifting upwards and Thailand
on course for 1,700.
Last full update
US facing major test of the
decade
29th April:
The S&P500 is
now battling with the strongest
resistance of the decade. If this
resistance
passes, we can expect the beginning of a
new long term bull trend, perhaps
analogous to that of the early 1990s. On
the other hand, if the index tops
at this juncture, the danger remains
that the decade-long range will
continue.
I am optimistic and think that the
balance favours a breakout and further
upside. Ten or twelve years is enough
range time for the market to trade
out the excesses of the tech boom
inspired 'new economy' myth. While there
are many overvalued stocks, the S&P
is valued
below the mean PE of 23. Reversion
to the multi-decade mean would
take the S&P to around 1,750. I
expect this to happen in the next year
or two.
Europe
and emerging markets are
still in the doldrums. However there are
a few bright spots. Hongkong has
turned around after a month or two of
mild bearishness. Singapore has broken
out of a three year range and Thailand
is making encouraging signs that
the market could be continuing its
rally. Indonesia and Philippines are
also still strongly bullish.
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