My last stock market update is found here (23 Jul 2010).
I wrote :
"Despite doom-sayers talking about a double dip recession and worsening European crisis, the market rallied for more than a month......I ran the new data through my models since the last update and it tells me that we are on track for a run up to a peak from end Jul to Aug 2010. "
When I wrote my previous update in late Jul 2010, there was a selloff that day because Bernanke said the US economic outlook is unusually uncertain. Today the DOW surged 203 pts because Bernanke said that US consumer spending will accelerate[Link]. The stock market ignored weak economic data in manufacturing[Link].
Since I haven't embarassed myself so far. Lets continue to look ahead. The market is indeed running up to a peak from end Jul to Aug 2010 and I expect pretty good gains in the near term. The market appears to be getting somewhat 'euphoric' and will quickly draw in much of the available liquidity. I ran the new data through my models and it shows we are going to peak between 20 Aug to 28 Aug (with a maximum likelihood of a peak on 25 Aug 2010). Since I've not given myself much wiggle room to fudge the forecast later on, I should ask for mercy if I do get it wrong afterall I'm not a professional and don't get paid for this (actually I do but only from my own investment returns)....you're entitled to bash me later if I get it wrong but do wait until late Aug to see if I've embarassed myself.
Like I said in my previous update. The economic outlook don't look too good. The leading indicators so far shows a slowdown in all major economies - US, Europe and China. I've said despite this impending slowdown, markets will rally due to liquidity and it is doing so right now....but when the liquidity runs out, the party is over....don't be left holding the bag.