Now that the Dow is down close to 930 points over the last 7 trading days, let’s take a look at the bullish side of the argument. I have two articles for you to consider.
- Why Wall Street’s oldest market timing system is bullish
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The stock market is not even close to topping out
First, take the articles above with a grain of salt. The timing system in question is the Dow Theory. Sure, the theory above is not confirming this bear market, but it is too slow for my taste. Well, at least half the system is not confirming this down move. The Dow Transportation Index is suggesting that a bear market is here.
Further, most market participants continue to believe that we are now in a secular bull market that has another 10 years or so to run. Most market consensus readings suggest that to be the case. Yet, as I have suggested so many times before, we still in a secular bear market that will only terminate in 2017. The last 2-3 years are always down. For instance, 1912-1914, 1946-1949 and 1980-1982. Unfortunately, there is no way to avoid it.
With that in mind, no market moves straight up and down. A healthy bounce here would be welcomed. Your job, should you choose to accept it, is to make sure that you don’t mistake this bounce for the next bull leg up.
