7/30/2015 – A mixed day with the Dow Jones down 5 points (-0.02%) and the Nasdaq up 17 points (+0.33%)
The stock market continues to behave as per our internal forecasts (subscriber section). If you would like to find out what happens next, please Click Here.
Are we about to surge higher or take a massive beating? Let’s take a look at both sides.
Bearish Case:
- We might already be in a bear market
- It’s time I reminded you how expensive stocks are — a 50% plunge would not be a surprise
It’s nothing that we haven’t talked about on this blog before. Think about it in the following fashion. The NYSE (largest index by capitalization) is already down 3-4% from its trading range initiation 13 months ago. The Dow set an important top on March 2nd, only to set in a double top on May 19th. The Dow Transports are flashing a major bearish reversal sign.
All of the above suggests that the market has been distributing for close to a year and once this distribution period ends, a new bear market leg will kick in. In fact, considering where the indices are today, it might have already started.
Bullish Case:
The primary argument on the bullish side is as follows.
- The market has been consolidating after a big 5.5 year run up: It is resting before the next leg up — Fair enough. I will give them this one. That is technically possible.
- The market is not too expensive: I am seeing this over and over again. This time is different, this sector, that sector, accounting, statistics, etc…. People try to twist their numbers in a million different ways to justify today’s valuations. At the end of the day it is rather simple. Shiller’s S&P P/E is at 27, the third highest level in history (behind 1929 and 2000). It is never different…..case closed
- We are in a secular bull market that has another 10 years to go. Wrong. If you study history you will see that bull/bear markets alternate in clearly defined 17-18 year cycles. The 2009 bottom was a mid cycle bottom, not a terminal point of 2000-2017 bear market. Meaning, we still in a secular bear market that will only complete in 2017-18. You can learn more about it here Market Cycles
Who is right?
I will let you come to your own conclusion. From my vantage point, the market has been in distribution for over a year now.
This conclusion is further supported by my mathematical and timing work. It clearly shows a severe bear market between 2015-2017. In fact, when it starts it will very quickly retrace most of the gains accrued over the last few years. If you would be interested in learning when the bear market of 2015-2017 will start (to the day) and its internal composition, please CLICK HERE.
(***Please Note: A bear market might have started already, I am simply not disclosing this information. Due to my obligations to my Subscribers I am unable to provide you with more exact forecasts. In fact, I am being “Wishy Washy” at best with my FREE daily updates here. If you would be interested in exact forecasts, dates, times and precise daily coverage, please Click Here). Daily Stock Market Update. July 30th, 2015 InvestWithAlex.com
Did you enjoy this article? If so, please share our blog with your friends as we try to get traction. Gratitude!!!
