Gut instinct tells me the US will make one last dash for the 16,050 level (a 5% move) over the next month and put in a significant long term high. Major stocks current in strong bull trends like PG and BA are approximately 8% off finishing their measured move and all time high retests respectively. AXP looks like it will make one more try for around the $78 mark, but like BA its chart is starting to become quite parabolic.
Back at home CBA completed a measured move and slipped strongly from $74. It would be all to perfect to see it try to rebound and retest that high over the coming weeks. ANZ burnt out near its previous all time high of $32 and also dropped off quite sharply.
Overall this is all one big mad dash for dividend yield but there comes a point in time when the market starts paying ridiculously overpriced values for a return on their investment. Price to earnings ratios well in excess of 15 for our banks, and north of 20 in the States.
We're well and truly into overbought territory now. Who's going to be left without a chair when the music stops? And where will investors put their money once they figure out the equity story is old hat. Gold could finally grab back some of the attention; recently it put in a nice test of a key long term logarithmic trend line stretching over 10 years.
Its going to be a very, very interesting second half of the year in my opinion.
