Market Commentary August 2017

Please find this month’s Market Commentary newsletter which contains our view on the stock market based upon fundamental and technical analysis along with some recommended investments for the current market.

Looking at the all-important US equity market, we see that 8 out of the 10 economic sectors are trading within 10% of their 52-week highs. Intuitively, one would conclude that this is a bearish signal and the next move would be lower. However, intuition can be a dangerous adviser. It is indeed a bullish confirmation of a broad-based market. Looking back at data since 1991, we see that investing only when there were 8 or more sectors within their 52-week highs has not only outperformed a buy-and-hold strategy, but also avoided the meltdown of the 2002-2003 and 2007-2009 bear markets.