The bull market is back on. The recent correction has run its course and the indices are now poised to enjoy further gains, in my view. The cycle on Wall Street is now firmly in upwards mode and there is plenty of scope for more here. Sentiment among ordinary investors is at fairly depressed levels, with only 27.6 per cent bulls vs 37.4 per cent bears in last week's AAII survey. This is, of course, a bullish omen.
Having caught a nice little move upwards in the Nasdaq 100 on Friday afternoon, I am looking for further long positions in the US indices today. I am still less enthusiastic about the European markets, especially the FTSE 100.
Click here for analysis of some leading equity indices.
The dollar is in the right timeframe to change course. The 77-day cycle is bottoming out around now, and the greenback could therefore form a low this week. I see no imminent signs of it, however, as the dollar is not particularly beaten up on its daily chart. My instinct is that this cycle turning-date will be a dud.
In this environment, my preferred strategy would be buying into commodities, particularly copper, which has a strong chart just now. Gold and silver are less convincing from where I am standing.
Click here for analysis of some leading commodities.
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Dominic Picarda is a Chartered Market Technician and has co-ordinated the IC's trading coverage since 2006. He is a regular speaker at trading and investment events and also holds the Chartered Financial Analyst qualification.