Continue to maintain a LONG/HOLD position if invested -OR- be in CASH if not.
2/7/2014 – Another large rally in the market with the Dow up 165 points (+1.60%) and the Nasdaq up 69 points (+1.69%).
Many market participants are calling for the end of the correction and continuation of the bull market. I believe they might be premature and the overall notion is beside the point.
As I have stated so many times before, the Dow Jones topped out on December 31st, 2013, ushering in the next leg of the cyclical bear market scheduled to bottom in 2017. While the long-term technical trend remains up and this could be viewed as a correction, my mathematical work is rarely off. First, it is yet to be seen if the rally over the last couple of days has any legs or if this is a simple bounce. Based on my calculation it is possible that Monday was the bottom, but the point of force was not strong enough to confirm an intermediary bottom.
Is it possible that the point of force discussed below is the top and not the bottom? Yes, that is a possibility. However, before I change my position to such an outcome, we must first have a strong follow through early next week. If we do not and if the market proceeds to roll over and go lower, the points of force below once again become our primary targets and turning points.
Either way you twist this, the situation above does not impact our overall trading portfolio. We continue to stay in CASH or LONG/HOLD while waiting for a confirmation that the bear market is indeed here. Please see tomorrows weekly update for a more detailed analysis.
Short-Term Projections:
As of today, I am not adjusting the points of force below. My mathematical work shows two points of force coming in February. Typically we should anticipate a turning point on such dates. (Would you like to see the exact points of force in both price and time? Please +Subscribe to our premium service above).
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Stock Market Update. InvestWithAlex.com February 7th, 2014 Google