Summary: Continue to maintain a LONG/HOLD position.
The stock market continues to “Melt Up“, setting new daily highs in the process. The trend is most definitely up. As such, there is no change in our overall position for the time being. As my mathematical work clearly shows and as I have stated numerous times here, the bear market will start in early 2014.
From the psychological as well as the technical perspective the market is significantly overbought and is set for a pullback. People are falling all over each other calling for some sort of an Economic miracle that will propel the US over the next few decades. All of that is just noise and you shouldn’t buy into that. Simply put, this market is driven by cheap credit, speculation and structure of the market itself (timing work that I do). Yet, rest assured, the bear market is just around the corner. Short term, my work shows a significant turning point around January 1st. I would expect a significant pullback to start shortly. At the same time, it will not be the beginning of the bear market. Hence, the advice to continue holding our long position.
My previous updates and various fundamental issues associated with the market remain right on the money. Please click on the links below to see them.
As we continue to hold our long position while waiting for the market reversal, right now might be a good time to start thinking about how you would liquidate your holding and/or re-allocate your capital once the bear market of 2014-2017 starts.
If you would like to take it one step further, this is a good time to start researching SHORT opportunities.
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Stock Market Update, December 27, 2013