June 2024 barometer update
World indices have experienced profit taking during May. However the last two trading days of May have seen prices increase. The Sector Rotation Clock has advanced to Middle Expansion in the cycle.
Here is the clock with the bullish and bearish super-sectors updated:
The super-sector Telecomms has moved to neutral from bearish, thereby unlocking the path (in my opinion) into Middle Expansion. This is not an exact science as sector ratings can change or even reverse. Confirmation of Middle Expansion will follow once Technology changes to neutral. However, that could take a long time.
To summarise the indicators:
The Barometer has remained at +3.
The Hi-Lo-Grometer has remained in the light green zone. The 52-week highs and lows both exceed 100.
The US Treasury Yield indicator has remained inverted but has fallen to the -100 points zone. I would expect this indicator to cease to be inverted once we are solidly in the Expansion phase. The current read out doesn’t fit in with previous cycle patterns.
The positive activity in stock markets will be needed to overcome the usual summer lethargy. Markets are fixated on rate cuts even though history has shown that bull markets are usually accompanied by rising rates, primarily to reign in over heating economies.
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