Approximately, 23% of the market is in the SELL WATCH/SELL classification and 17% in the BUY WATCH/BUY classification. This is a much better, balanced condition, than what we experienced at the end of 2017 when 24% was solidly in the SELL/Overvalued classification and only 11% in the BUY/Undervalued classification. This lopsided condition continued to get worse until the last quarter of 2018 when stock prices reversed and relative valuations on the SELL classification returned to normal. The current levels of 11% SELL and 9% BUY are supportive of continued improvement in the market. Please do not equate that to a belief that the market will never go down again, because it will, but it is true that relative valuations can support higher market values for some time into the future.
Everyone appears to be waiting for something before they can decided where the market and the economy are headed. Ms. Yellen is waiting for inflation, Mr. Draghi is waiting for economic growth, some investors are waiting for earnings, others are waiting for a correction, and some just can’t believe growth can continue because, well, it has been going on for so long. Everyone is waiting for something else to occur. We have been concentrating on fair valuations and the changes within valuations for markets, sectors, industry groups and individual stocks. The message continues to indicate slow and steady growth with hesitations when the market gets ahead of itself.