Tech to keep going, Arht is now only getting eyed up.Tidbit from a well respected news letter I follow: July Technical Speculator Newsletter
What does all of this mean? At present, the U.S. and Canadian key economic information is in rough shape, while markets have recaptured 60% or more of the March decline. From our perspective, this is all good news. Stock markets lead the economic data by six to nine months. This is because investors look forward. Our models suggest that some minor pullback or stalling over the summer months should be expected. Not to worry – the secular bull market is definitely intact. Markets are expected to recapture their all-time highs by year-end. The NASDAQ already posted a new all-time high. The S&P 500 should also move to a new high by early Q3.
What should investors do? Continue to focus on deflationary sectors. Although precious metals are currently showing some upward movement, the rise is from the massive injection of capital from the Fed, and the weak U.S. dollar. Nevertheless, the most important idea that investors should take away is that the bull market has more upside over the next few years. Short-term pullbacks, like the one we experienced over the last couple of months, are normal and all part of a broader secular trend. Use any retracement as a buying opportunity. We continue to stress that investors should focus on deflationary sectors (technology, financials, industrials, consumer discretionary products, and healthcare) during this bull market. Limit purchases in inflationary sectors (i.e., commodities) to short-term trades only.