The S&P 500 has broken to new highs this morning as the US dollar slides and Emerging Market trade fears subside. Although it is not unusual for a B wave to break above the 3rd Wave high in a correction, it does give reason to second guess the assumption of an imminent decline. It is important to consider that this is August, one of the slowest and lowest volume months of the year. Also Wednesday will mark the longest bull market in S&P 500 market HISTORY, which will be a great contrarian indicator to flash headlines to the masses before a huge sell-off as casual retail investors will rush in, only to get fleeced. The main concern still remains that Turkey's economic collapse is all but a guarantee, not a matter of IF but WHEN. We do not see Trump or Erdogan finding a political compromise as the ego stakes are too high. We remain cautiously bearish on US equities but in this low volume environment, there could be greater price rallies higher before we see a final wash to the downside.
