It is looking more and more like a V bottom for the recent sell-off. The classic case is for a retest of the most recent lows before real recovery begins. That is what many pundits have been predicting. However, it is not one hundred percent, and probably is not the case this time. Too many investors went to the sidelines and now fear being left behind. They are being drawn back into the market. It’s astounding how often when so many position themselves for a particular outcome, the opposite happens.
So upward we go.
Index price levels are now back within the trading range that was established last year. They should approach upper levels; we’ll see how far the indices get. However, market leaders are changing. It has moved away from technology companies to financials, industrial, and material stocks. In short, those companies that have been ignored for years and are trading at very attractive valuations. These stocks might be categorized as value rather than growth. We’ll see if this new emphasis follows through soon. We have been expecting this, stay steady, my friends.
El Solo Toro