This article will serve as an update for my previous article. I continue to monitor conditions which I believe, when coupled together collectively present a solid underpinning for the stock market. They are:
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Inflation remains stable and low.
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Interest rates remain stable and low.
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The VIX continues to remain stable and low.
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Currency values remain stable.
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Commodity prices remain stable.
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Central Banks remain accommodative.
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Top-pickers continue to fuel a bull market.
Here is a review of the charts that confirm these conclusions and the continued sideways paths and benign natures of all but the S&P 500 Index, which continues to make new all-time highs.
In conclusion, I give low probability to a major market sell-off amid such conditions, and believe the stock market will continue to have legs if the above observations remain intact. One final chart worth watching is the PHLX Semiconductor Index (see below). I previously expressed bullishness for it as the triple-top resistance of 2003-2007 (seen in red) was recently breached with momentum. If the index meaningfully breaks through the Fibonacci 38% retracement resistance level and conditions 1-7 above remain intact, I entertain the possibility for further gains in stocks barring any negative geopolitical event. In essence, for now central banks continue to have their way.
