by Ian Harvey
July 19, 2017
It's been a great few months for stocks, and the stock market euphoria (meaning the end of the bull rally – market top) has still not been reached; signifying that the rally isn't anywhere near over yet.
The stock market is displaying signs of complacency, where any negativity is spun into a positive light; probably in a belief/enthusiasm to thrill/exhilaration stage according to the psychology of the market cycle.
Mark Tepper, president of Strategic Wealth Partners, is extremely positive that the stock market bull rally is far from over stating, "The odds are very high that the S&P goes all the way to 3,000."
Tepper makes the point that analysts are quite bullish on company earnings; and says, "Over the course of the last five years, actual earnings have exceeded estimated earnings by 4.2 percent a year, so you throw in some earnings beats and all of a sudden, you're sitting at that 3,000 number in 2019.”
Stocks remain in the driver’s seat being on the move throughout July; despite an atmosphere of ultra-low volume, narrow breadth, and widespread investor complacency.
Earnings releases will accelerate in the weeks to come, which in-turn will produce a strong market directly ahead. While the second quarter estimate is lower, it should be a strong quarter, and the 4th quarter in a row that shows positive earnings momentum. The month of July generally tends to be positive for the S&P 500, and volatility tends to ramp-up; which is great for options traders.
It therefore, appears that the market top is still some time away, as the "euphoria" phase of the sentiment cycle still seems to be a mystical point in the future.
The old adage "markets advance on a wall of worry and decline on a slope of hope,” does not seem to be applicable at this stage.
Given the strength of economic reports this
past quarter it would be hard to imagine a poor result for corporate earnings;
and even when a company declines due to a miss or unfavorable news; options can
easily handle this situation.
Short-term profits are now easy to grab. Make the most of the continued rally – Click here to be part of these profits…
The results say it all!