US equites are robust and ready to go, according to Ron Meisels at Phases & Cycles.
Meisels says the 2400 level, a level that previously acted as resistance, has been confirmed as new support for the S&P and will likely propel the index towards 2500 or higher with a summer rally. He thinks it significant that the S&P did not experience a “sell in May and go away” or a “June swoon” this year, but instead looks “robust and ready to go”. As such, Meisels believes the up-trending market has reasserted itself and that buying opportunities have arrived.
This expectation of strength is confirmed by several factors for Meisels, including: Weakening bullish sentiment (a contrary indicator); last week’s rally to a new all-time high at 2463; and broadening participation in the market – the percentage of NYSE stocks above their respective 50-day Moving Averages is now at 70%, the highest level in over four months.
Meisels says the move to new highs looks like another extension to the up leg that began in November 2016 and thinks the 18-month trend channel has potential for even higher targets, albeit it will have to overcome the tendency in post-presidential election years for a weak autumn period.
Read the full report.