Based on the chart below, it looks like the market is setting up for a run at the January highs. There is still plenty to worry about, but the issues have flushed out the excessive bullishness.
The market feels so strong today, and maybe I getting swept up in the enthusiasm. But with the Nasdaq hitting new highs, I think we can say that the medium-term trend has turned upwards again.
A close under this week’s low would indicate that I am wrong, and, if that happens, it would be time to get defensive in accounts again.
Outlook Summary:
Higher rates are now a headwind for US stocks. The recent tax cut, the 300 billion spending increase, and the already out-of-control federal deficit are a set up for a very dangerous spike in interest rates.
Something else to consider is the Mueller investigation. I worry that the headlines generated by the investigation may rattle the markets more than people are currently anticipating.
Strategy:
