No. of Recommendations: 4
I don't understand the comment about "a bullish transition will occur soon". It appears that we've been in a bull market for a while now. The market hit a new all time high just a few days ago. So what's the transition?
A bullish transition of *this omen*. It has stayed negative recently, since the first half of 2023. Since the current level of the market isn't an input--it's not a momentum model--the fact that the market has been rising doesn't mean that the signal has been bullish.
That's not what I said. I questioned the assertion, as I understood it, that now that the indicator has turned bullish, the market is likely to turn bullish soon. First, perhaps your smoothed indicator may have just turned bullish. I don't know. What I see is that the spread between the policy rate and the 2 year bond turned positive back in March, in response to oil and inflation spiking. So not very recently any more. Second, the market has been bullish, extremely so, for more than a year. So how can a bullish transition occur soon?
The question in my mind right now is whether a trend from high inflation to higher inflation is bullish for the market. I suspect that it is.
