EC A Goldilocks Moment?

This is not to say that the bull market is about to end. No, from my perch, the backdrop for stocks continues to lean bullish (as evidenced by all the green in the Primary Cycle Indicator Board - see below). However, when everything starts to look a little too good, sloppy periods, pullbacks, pauses, and/or corrections tend to ensue.

While I readily admit that this market certainly seems to want to head higher - perhaps even substantially so - we should probably keep in mind that countertrend moves can happen at any time, and for any reason.

The point here is that while Goldilocks appears to be in the house, we shouldn't be surprised if things cool off for a bit in the near future. You know, just long enough for the porridge to become "just right" again.

Here's hoping you have a great week. Now let's turn to our weekly model update...

The Big-Picture Market Models

We start with six of our favorite long-term market models. These models are designed to help determine the "state" of the overall market.

Primary Market Models

* Source: Ned Davis Research (NDR) as of the date of publication. Historical returns are hypothetical average annual performances calculated by NDR.

The Fundamental Backdrop

Next, we review the market's fundamental factors including interest rates, the economy, earnings, inflation, and valuations.

* Source: Ned Davis Research (NDR) as of the date of publication. Historical returns are hypothetical average annual performances calculated by NDR.

The State of the Trend

After reviewing the big-picture models and the fundamental backdrop, I like to look at the state of the current trend. This board of indicators is designed to tell us about the overall technical health of the market's trend.

The State of Internal Momentum

Next, we analyze the momentum indicators/models to determine if there is any "oomph" behind the current move.

* Source: Ned Davis Research (NDR) as of the date of publication. Historical returns are hypothetical average annual performances calculated by NDR.

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The opinions and forecasts expressed herein are those of Mr. David Moenning and may not actually come to pass. Mr. Moenning's opinions and viewpoints regarding the future of the markets should ...

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