US Equities Intrinsic Average

22 дек. 2023 г.

The yellow resistance zone is expected to be pivotal for the stock markets. Although some indices appear close to ATHs, the presented spread graph suggests the intrinsic value of the US stock market isn't even half of the previous highs.

Same graph with monthly candlesticks:


Fundamentally:

• Although rate cuts are expected, historically they mark the beginnings of bear markets
  
• The significant 7 makes up more weight than Canada, France, China, UK, and Japan combined.
  
• With de-dollarisation and world progressively relying less on US doesn't look positive for the 7 giants
  

Timing the markets can be difficult, but with

1. the recent deterioration in the labour market
   
2. shaky elections in 2024 (likely to be priced in before)
   
3. historically strong equities from January to mid-February
   
   --> I speculate a bear takeover in early 2024.
   

For intrinsic graph sceptics, here is a simple average of the 4 indices: