It’s official, my long-term market timing model has confirmed a buy signal at the end of June. It first flashed a sell signal in late January when the 14-month RSI of the NYSE Composite exhibited a negative divergence when the market made a new high, but RSI didn’t. Now it flashed a buy signal at the end of June when MACD recycled from negative to positive (bottom panel), though you have to squint to see when it went negative in May.
This model has shown a strong track record over the years. If you had sold in late January and bought back in when the S&P 500 made a new high last week, you would have missed the tariff drama drawdowns of the last few months.
In my discussions with investors, one key question keeps coming up. The S&P 500 is trading at a forward P/E of 22. Can a new bull truly begin at such elevated valuations?
The full post can be found here.
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