‘US Bull Mar­ket In­tact; Chances of S&P 500 Touch­ing 2,700 are High’

The Economic Times - - Money -

there was no fol­low-through sell­ing and they ended very strongly. That looks like it re­ju­ve­nated and re­con­firmed the fact that the mar­ket was in an up­trend. The big­gest con­cern that we would have right now is the age of the trend in the United States. It bot­tomed in 2009. The trend is al­most seven years old. That is quite old based on the his­tory of cycli­cal bond mar­kets in Amer­ica. That would be the con­cern we have at this junc­ture, the age of the trend.

FU­TURE OF DOL­LAR

What is the dol­lar chart in­di­cat­ing? Well, the emerg­ing mar­ket cur­ren­cies had an in­cred­i­bly bad 2016 and a lot of them fell dra­mat­i­cally. Now, they seem to have sta­bilised and they have started to trend higher as have emerg­ing mar­ket eq­ui­ties. The key ex­change rate re­mains the euro. It has been trapped in a range now for two years, ap­prox­i­mately be­tween 105 and 116. We are still lean­ing to­wards the idea that the dol­lar will strengthen again but this is no longer a view you can be com­pla­cent about. You must un­der­stand it could go ei­ther way. Any gains that the dol­lar has had this year will likely be part of a top­ping process. The next sig­nif­i­cant move in cur­ren­cies will be to see dol­lar weak­ness but that may be a story for next year.

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