Australian Investment Blog

How can we be positive US equities at these levels? At the start of 2016 our forecast for US equities was a rally to fresh all-time highs followed by a significant correction. So far this year has produced some significant volatility but neither of our anticipated events have played out (as yet). We commenced the year with an aggressive 11.4% sell off, primarily on China concerns, which was then followed by an equally dynamic 16.6% rally to within 1.1% of last year's all-time high. We still expect a final thrust for US equities, likely over the 2200 area, to complete a classic 5 phase bull market advance since the rally commenced in March 2009 - see chart 1. At this point in time we do not anticipate a 20-30% correction from US equities until we have experienced this "blow off top". Market Matters will remain flexible around this view, just like we have since our previous January thoughts.....our best "guess" at present would be for a major high in early 2017 but this will be constantly updated in our daily reports. S&P500 Index Monthly Chart