The bulls remain in complete control of US equities, according to Ron Meisels at Phases & Cycles.
Meisels points out that the S&P 500, Dow Industrials and NASDAQ continue to make new all-time highs week after week. More recently, he says the bull market has been reinforced by both the Russell 2000 and the Dow Transports also making new all-time highs, and a break-out to a new high for the NYSE Composite – an indicator of broad participation.
Despite the bull run, Meisels maintains that US equities are only modestly overbought – the percentage of NYSE stocks trading over their respective 50-day Moving Averages was 68.0% last week, “a healthy but not excessive figure.”
Some overhead resistance exists, however, from the 70-day and 105-day cycles, but Meisels thinks downside risk remains a modest 3 to 5 percent. As such, his view is that any market weakness is an opportunity to invest in strong sectors and stocks.
Read the full report.