The summer rally for US equities is nearly over and a healthy correction is around the corner, says Ron Meisels at Phases & Cycles.
Meisels points out that on three occasions since April the S&P has pulled back to just below its rising 50-day moving average and then moved rapidly to a new high. He expects another such pullback shortly, with the 2400 level and, below that, the rising 200-day moving average and 18 month trend channel (2350/2360) coming into play should the market weaken for longer and deeper than expected.
Overall, Meisels believes the long-term bull market is intact and his recommended strategy is to buy strong stocks on weakness.
Read the full report.