“Providing this trend remains up then the market is a buy. A test of the 2007 peak is the target. Only if the ratio were to roll-over would the need to play defense be necessary,” the bullish analyst wrote in a newsletter.
“Regarding the Cyprus situation, it will only cause a small blip in the general equity rally and that blip is already in the rear-view mirror. Any residual weakness in the market is a buying opportunity,”
he added. “The U.S. market is just too stubborn to let events from a small island in the Mediterranean, impact its ongoing upward trajectory.”
The chart below shows the relative performance of consumer discretionary vs. consumer staples.
