When The Music Stops Will You Have A Chair?
When the music stops, will you have a chair to sit on? The market can’t keep going up like this forever. At some point in time we will get a correction — quite possibly a meaningful correction. And when we do, will you be prepared?
In the weekend newsletter we pointed out a lot of extended names that needed to come back down to earth. That would be in line with the 5th wave needing some work. We’ve got 3 waves up but yet no clear 4 or 5 (SPX daily chart below).
Notice the MACD at the bottom of each chart? It is rolling over just like in January. We don’t use MACD too much but when you see the same thing with every index, it’s hard not to notice.
Bottom line: we are close to a trend change. Sure some in wave land will tell you that here comes a retest of the March 09 lows over time, however we’ll take it one step at a time. They don’t know.
The bullish side of the equation is that there is a 61.8% Fib level on the S&P 500 at 1228 and that is where we are going. But the bulls too don’t know.
Speaking of that has anyone seen the BROAD BASED WILSHIRE 5000 Index in a weekly time frame? Sporting Negative divergence and hit the 61.8% fib level.
With everything we are showing you how can you possibly be a bull over the medium term and especially the long term, that is unless you still trust Wall Street to do you right this time around. That’s the big social issue that we as a society are meant to get. And that is trust. Can you trust them? Can you trust traditional Wall St.? Washington? Can you trust any of them to take care of you? The days of being a drive by informational investor are over. This is YOUR TIME, YOUR TIME TO TAKE CONTROL BACK OVER OF YOUR FINANCIAL DESTINY.
We’ve just had a run of historical nature as far as bear market rallies go yet the markets haven’t gone anywhere in 10 yrs! What possibly makes you think that we are back to peaches and cream again? GDP? What a joke, back out the Government spending and GDP grew how much? Basically nothing. That is not the stuff LASTI
NG bull markets are made of.So what does this all mean to you? How do you use this to your advantage?
At some point, sooner rather than later most likely, we will go into a correction. When that happens there will be names that will fall 2-3 times what the market does. That’s what we are always vigil about — scanning for change in trends patterns and bringing them to your attention. On your most extended issues keep raising your stops.
If putting new money to work, expect to get chopped around.
