research report with permission of Phases and Cycles. This should not be construed as an endorsement of the report’s recommendations. For more on The Globe’s disclaimers please read, we suggested that the bulls had been running strong but that a brief pause could provide some relief. Markets climbed the proverbial “wall of worry” over fears about inflation, interest rates, wars in Ukraine & the Middle East, and the U.S.
The market’s reaction to the reelection of Donald Trump prompted a rally to new all-time highs for the DJI and SPX as of the time of writing. And to satisfy the Dow Theory experts, the DJT also had a breakout to a new three-year high. We caution that a further rally would likely turn more investors bullish, which could push the bulls into the 60%-zone. The decline in markets at the end of October coincided with the maturation of the 39-week cycle. The next cycle maturation is expected in late November, meaning that there could be some market weakness in late November followed by more bullish activity in December.