Long-term trends and behavioral tendencies likely to influence U.S. Equities in 2017
U.S. equities entered a secular bull market in 2013, breaking out above a 13-year range in dollar terms, and staging a bona-fide reversal in gold terms.
A cyclical bull market began in February 2016, evidenced by classic breadth thrust and a definitive price breakout.
The February 2016 bottom qualifies as a four-year-cycle low, suggesting a durable rally into 2018 or longer.
Valuations are stretched, but the earnings cycle appears to have bottomed.
A narrowing of market breadth is likely to precede the next important top. Defense remains important. Let’s keep drawing those “lines in the sand.”