With negative headlines continuing to hit the tape, the U.S. equity continues to climb the wall of worry as the bears get louder and louder, voicing both their displeasure and amazement. Our work continues to be medium term constructive and still supports a barbell approach towards secular growth/FAANG and Values/Cyclicals.

Given the riots across the country and rising US-China tensions, the bears are vocal that the current move is unjustified and will end painfully at any minute. However, based on our work, we do not support this negative outlook and have been advising investors to keep their eyes on the bigger picture —the economy is beginning to heal and there is massive monetary/fiscal stimulus to fuel equity prices on a 6-12 month view.

We reiterate our main conclusions since 3/20, when our key indicators flashed buy signals for the S&P 500. Our key conclusions are as follows.

➢ Despite the possibility of tactical consolidation/pullback, we are constructive on US equities for 6-12months and are viewing tactical weakness as a buying opportunity.

➢ Our work indicates that (1) the low for the S&P 500 index (SPX) is in and there is a chance the benchmark index could make new HIGHS before the year is over, and (2) the market is NOT extremely overvalued ...

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