An interim high in the US stock market is now due. The pullback should last several months at least before the markets move to new highs towards the end of this year.
The pullback is occurring because of the over-extended nature of the market – it has performed powerfully since early February 2014 and so a modest pullback is warranted. It also presents an excellent buying opportunity.
DJIA to pullback but NOT below 12875 with a likely low point around 14750.
S&P500 to pullback but NOT below 1600 with likely lows around 1737.
Underlying money supply growth has been unstable in recent months undermining the strength of the surge and the capital goods market.
Should our levels be breached indicating a deeper pullback we will advise on our expectations accordingly.