> > As the US is now into the second worst bear market this century it is > important to remind ourselves that things do turn around at some stage. We > are seeing some signs of strength in the U.S economy with persistant > strength domestically. Following are some points to remember when looking > at this market- > > Strategically 3 out of 4 top down drivers are pointing in the right > direction. > > Valuation models are in attractive territory - the current valuation > position has not been seen since Sept 01,the depths of the Asian crisis, > the early 1990's and the early 1980's. > Liquidity remains supportive - the net liquidity position could over the > next 12 months be stronger than seen in the last few years, providing a > strong signal of liquidity driven support for equities. > Sentiment Measures - Our Asia / Pacific strategy team's "Risk - Love" > indicator of investor sentiment comprised of a combination of market > sentiment indicators is firmly in panic territory.Historically this has > provided a solid buy signal for Australian equities on a 12 month basis. > > Earnings potentially the near term weak link. Our analysis suggests the > macro economic backdrop may not be sufficiently strong enough to match > earnings estimations in the market for the June 03 financial year. > > > Investment Cycle Theory > There are analyst whom purely concerntrate on following cycles to assist > in making financial decisions ( each to their own ), see the following > comments on www.dowtheoryletters.com. > > The 20 year cycle may hit its low around October of this year . The last > 20 year cycle lows were struck in 1942,1962,1982 and ????????? > The 20 week cycle is also showing signs of bottoming. > The Presedential Cycle , a four year cycle. This cycle hits a low > somewhere in the two years prior to the actual presidenatial election. > this cycle has been seen to have worked during every pre presidential > election except during the bear market period of 1930-32. > The obvious 'good six months' is in front of us whilst the 'bad six > months' is behind us . Investing November through to May has in the past > proven to be more profitable than the prior half of the investment year. > > Finally the US market is on its way to a third consecutive down year - it > is stated on the Dow Theory Letters web site that the US market has never > been down four years in a row. >