Doms thoughts
The rally in risky assets is in good shape. One commentator remarked overnight in relation to the Asian markets that investors were looking “for any excuse to sell at these elevated levels.” In Europe and the US at least, I see no evidence whatsoever of “elevated levels.” Instead, I see markets that are in the earlier stages of a significant new leg up in a strong bull market. The worst I really envisage for now is further choppy gains, rather than a powerful and thrusting move. I am therefore treating the latest mini-pullback in the DAX and FTSE as a further opportunity to get long.
Despite its rally of the last few days, the FTSE at its highs yesterday was only at the middle of its recent daily regression channel. Tops have tended to occur at the upper reaches of this channel, currently at 6080. Simply put, I think there is further room to rally here, with an initial target at 5989.3.
A rally from current levels (5903.2) would get me long.