Summary: Continue to maintain a LONG/HOLD position.
The stock market continues to “Melt Up“, setting new daily highs and in the process ending 2013 with a massive 24% gain. As of right now, the trend continues to be 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 shortly. Either way, we still have to wait for a technical confirmation.
Many bears have been emailing me lately and asking how is it possible that the market continues to go up. Something important has to be understood. The stock market traces out exact mathematical patterns as it moves over time. Meaning, the market is doing exactly what it should be doing. You see, there is a point located in both price and time that the market must hit before resuming its bear market later this year. Think of this point as a point on a map where all roads converge. The market must go there before reversing. All other fundamental and otherwise technical indicators, do not matter. It must hit that point before reversing. Such market behavior is the reason why a lot of people get hurt playing the “short term” fundamental game.
Back to the market. 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, January 3rd, 2014