11/12/2015 – A negative day with the Dow Jones down 254 points (-1.44%) and the Nasdaq down 62 points (-1.22%)
At this juncture most investors have assumed that the correction is over and that the market will push higher over the next few months/years. In fact, the Dow 20K is once again just around the corner. As is illustrated in the video here Fed must weigh impact of new financial market landscape: Yellen
“It is crucial to understand the effect of regulations and possible changes in financial intermediation on monetary policy implementation and transmission,” Yellen added.
In other words, “Blah, blah, blah”, we have no idea how we will raise rates without setting off a major correction in MOST asset classes.
On the flip side, I believe this guy has the right idea. The Fed’s going to trick the market, again: Trader
Which is the view I have expressed here so many times before. Particularly, what the FED will do is as clear as night and day. It goes something like this…..
- Can’t raise or won’t raise. Today’s economy or financial markets won’t be able to digest any rate increases at this juncture. Period. As talked about on this blog so many times before. Why The FED Will Not Raise Interest Rates If the FED members have even an ounce of intelligence, and I believe they do, they realize the same. Point being, they won’t raise in any meaningful way. If at all.
- If the market declines, issue a “Dovish” statement. Bring it up. (Late September)
- If the market recovers, issue a “Hawkish” statement. As they did last week. Remember, they don’t want things too overheated.
- Rinse and repeat while praying the market and/or the US Economy won’t implode on their own.
Finally, no one has stopped to consider the other alternative. That the rally off of August 24th or September 29th lows is not the beginning of the next leg up, but a corrective motion. For instance, the market left quite a few down gaps. Down gaps it will have to close sooner or later. The angular composition of this move higher, at 85 degrees, suggests a counter trend rally, not a structural move higher.
In other words, the market is suggesting this move higher might be a bounce as opposed to a new bull market. If true, today’s “Healthy” correction can very well turn into a major sell-off.
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. Noveber 12th, 2015 InvestWithAlex.com
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