While the U.S. equity market continues to trade sideways and has been unable to make a new high since peaking on June 8th, our tools and key indicators remain bullish.

I initially turned bullish on the U.S., equity markets in late March subsequent to our key tactical indicators flipping back to favorable. Since then, I have been quite consistent and vocal about our constructive outlook and our main conclusions remain as follows:

  • Despite the possibility of short-term consolidation/pullbacks, I am constructive on US equities for 6-12months and are viewing any tactical weakness as a buying opportunity.

  • Based on our research, the low for the S&P500 is in and there is a rising probability that the benchmark index will make new HIGHS before the year is over.

  • The market is NOT extremely overvalued as some are fearing. In fact, our work is suggesting an S&P 500 target range of 3600-4400.

  • I am still recommending a barbell approach that includes a mix of FAANG/secular growth stocks and cyclicals/value as Overweights and defense and cash as Underweights.
Not surprisingly, some of the front-line Cyclical/Value impacted names (as my colleague Tom Lee refers to as “Epicenter” stocks) are showing small pauses. I view this as just part of the longer-term healing process and do...

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