In my last update on the Counts from the Middle Section that I am following, I wrote that it was possible the U.S. stock market could have a steep correction that would bottom out in June. However, I did a more precise calculation recently by counting exact calendar days between the critical points in the Middle Section pattern. That actually gives us a target of July 12.
However, if this scenario plays out, I think the window for the correction bottom could be anywhere from late-June to late-July.
It’s really hard to tell what the market’s next move is going to be. It’s been going sideways since mid-April right below the 2015 highs, and unless we get a decisive breakout above the 2015 highs, I’ll refrain from making any calls.
As for the upcoming “Brexit” vote, I think that if the U.K. votes to leave the EU, the impact for markets will be rather short-term. The market may drop for a couple weeks, but ultimately, stock markets have repeatedly shown an ability to discount world events rather quickly as long as the events are not associated with clear signs of macroeconomic deterioration.
But whatever happens in the short term, I expect the U.S. stock market to make new record highs in the 2nd half of this year.