SOME ARGUMENTS WHY THIS IS A BULL MARKET

Yesterday US benchmark indices stopped a bit and didn’t keep heading further north. The market modestly weakened about the anxiety of Ukraine issues and closed in the red territory.

• Dow - 0.28%
• Nasdaq - 0.16%
• S&P 500 - 0.21%

So this is a good time to bring some more fundamental and technical arguments why we think the market is in a bullish track and why it is not a bubble at all.

Some key facts:

• Investors remain pessimistic and there is no any sign of euphoria at all
• Vast majority of investors are still uncertain to start to buy or not. So there is a huge buying force potential offside
• US pension funds have their lowest equity allocations in more than 30 years
• Wall Street strategists still continue to underweight equities in their recommendations and offerings
• S&P 500® high beta stocks (100 stocks out of the S&P 500 Index with the highest sensitivity to market movements, or beta, over the past 12 months by Standard & Poor's) are selling at their cheapest relative valuations in nearly 30 years.
• There is no enthusiasm on the corporate side neither

The general uncertainty is great. Without this there is no opportunity. This general disappointment and pessimism about this “most heated bullish rally” strengthen further our bullish attitude. We are at the phase of pessimism in the optimism/pessimism cycle and we do believe it still takes time for the majority to realize the market is really bullish.

The BFM Assets Team.