A 136-point rise since last Tuesday's update has taken a refreshed index to within 3.3% of my target of 16,175. The long recommendation remains intact.
We should all be grateful that in recent years the US Federal Reserve has had as its Chairman probably the best head of any central bank in our generation. Ben Bernanke's decisive handling of the financial crisis since 2007 has been astute, displaying an awareness and understanding that was (and still is) lacking in most other central banks. He has consistently, and correctly, ignored those voices suggesting his policies would lead to rampant inflation. It was reassuring to read the Federal Reserve's comments last week that it remains concerned that ‘persistently low inflation could hamper US economic growth dynamics’. Too often we have been led to believe that inflation is the great enemy, eroding away our wealth into retirement. On the contrary, I see inflation as a vital and central plank for any prosperous capitalist society. Japan at last realises this. Let's hope more central banks come to this understanding too, and also look to nurture higher inflation in years to come.
Again, there are no changes of note on today's chart. Very little lies in the way of resistance between current levels and the bottom of my major target band, 16,023-16,186.
Recommendation: Stay long. Take profit and sell short at 16,175.