We are now in August, a month that use to be very choppy with rallies and drops. We saw a bit Wednesday how it use to be during August. The monthly charts give a good picture of what we can expect. The last five waves get steeper up for every wave which confirms that current wave is the last and we have either got the top or we will continue up to my target 16.000 for the DOW. August is the biggest vacation month and the robots will fight them self, that is the reason for the wild swings I expect. The monthly top formations can go on until October where I still expect the bear markets to start at the latest. The fundamental situation is good in the US and China long indexes seem to be in a strong corrective uptrend. Europe in FTSE, DAX and SWED look strong to hold up at least for the next three months. To take new highs I think is to ask to much. We now know from FED and ECB what their rates policy will be far into next year. There are signs that even the worst off European indexes are bottoming. The big interest situation have only started with bonds in Europe and the US falling. This will develop during the coming months and be the reason for the collapse of the stock markets later on. In the US there are already trouble with too high rates but as I see it - it is just the beginning.
The P/E ratio in the US is 14 which is in the middle of the long term range and stock picking in the slow markets during summer will keep the indexes up is my feeling. To me it is only a question of rates that is interesting going forward. To compare the falling bond markets with the stock indexes. The last few weeks the falling US notes have had a pause and even an uptick which has given room for stock buyers nerves.
The weekly trends are quite strong for DOW and SP500 but less so in Europe where it looks like a topping out process.
This is my spontaneous feelings but we will find the tops in the charts long before the fundamental markets wake up. I take every day seriously because I have seen too many surprises since 1974.
The P/E ratio in the US is 14 which is in the middle of the long term range and stock picking in the slow markets during summer will keep the indexes up is my feeling. To me it is only a question of rates that is interesting going forward. To compare the falling bond markets with the stock indexes. The last few weeks the falling US notes have had a pause and even an uptick which has given room for stock buyers nerves.
The weekly trends are quite strong for DOW and SP500 but less so in Europe where it looks like a topping out process.
This is my spontaneous feelings but we will find the tops in the charts long before the fundamental markets wake up. I take every day seriously because I have seen too many surprises since 1974.
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