Market Due for Pullback but Long-Term Outlook Still Bullish, Strategists Recommend Raising Cash for Buying Opportunity
• Short-term indicators like percentage of stocks above 50-day moving average and percentage above 20-day EMA suggest market is overbought and due for a pullback • Downside target for S&P 500 could be around 4,600 level, which would be a mild 4% drawback from recent highs • Longer-term bullish outlook remains intact based on economic fundamentals and statistics like the Russell 2000’s 20%+ 50-day rally • Short-term defensive positioning is warranted while awaiting an opportunity to put dry powder to work after a pullback • Services focused solely on security analysis don’t provide the comprehensive top-down strategy offered in The Portfolio Architect