US indices edged higher overnight as strategists slowly jump off the bear wagon, e.g. this week, Morgan Stanley raised their target for the S&P500 to 5400 from 4500, which was clearly looking very wrong after May’s strong performance. While this sort of capitulation does make us smile, we are mindful that they often occur near a market extreme – some traders advocate doubling up when you feel like capitulating on a view, placing a close stop and turning off the screen! Nvidia (NVDA US) closed near its all-time high this morning ahead of its eagerly awaited earnings report this week, a result that could have a huge impact on market sentiment.
- Our preferred road map over the coming weeks/months is the US market tests the 5500 area, now only 5% higher.
- However, we are conscious the market has already made new highs in May, and this is a “breakout” we would not aggressively chase”.
MM is now cautiously bullish on US stocks short-term
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