US market remains my favorite market at the moment. Emerging markets are taking a beating primarily due to a strong US dollar. Emerging markets (EM’s) have gotten cheap but I expect more down side. A time will come to buy EM but I will wait for sideways action in the US dollar.
September is usually a weak month for stocks. In October, we will see the market push up again. Earning are behind us. The market will probably react to negative news out of EM’s, Europe, and trade war talk for the month of September.
I don’t believe US stocks are overvalued. Corporate profit growth is 25% year-over-year. This will push US stocks to all time highs once again.
US stocks are testing support at their previous all time highs. If this support level breaks, I expect some follow through on the down side and we will see our usually correction for this time of year. This will be a buying opportunity.
