Similar to last week we are bullish on the developed markets including the US, Europe, Japan, Canada, and Australia. We do not like emerging markets at this point except for certain emerging markets such as Russia, now Poland, and South Africa. We do like Mexico as well but sitting on the side lines as far as Mexico is concerned for now. In addition, we like energy and real estate.
Our US measures have reached very bullish territory. Our US long measure is currently 0.62. The last time we seen this measure hit 0.62 was back in February 23rd of 2004. Two weeks later, March 7th of 2004 the market pull backed between 4 and 5%. And then it was the start of a bull market. The last time our short indicator hit its current level was back in September 20th of 2009. The next two weeks the market fell 4%.
We have never seen our long indicator fall below 0.60. We believe this is the floor. Our short strategy is to witness some major movement in our indicator before shorting. We will pursue that strategy going forward. We have not seen any movement
in the indicators so far. We will wait for another two weeks than access the situation because than we believe the market is due to correct around 5%.
At that point we believe the market will continue to rise after the pull back until the summer.
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