Summary: Continue to maintain a LONG/HOLD position
In my last weekly update I suggested that traders should set themselves up for a rally that was surely to come due to the US Government resolution. We did get that rally over the last couple of days and the DOW now sits close to the previously suggested range of 15,300-15,500.
Most importantly, we are approaching the moment of truth.
Ladies and gentleman, this is the moment we have all been waiting for. Over the next few weeks we will find out if the bear market has already started or will start in March of 2014. Should the market break below 14,600 over the next two weeks, the probability is high that we have already started the bear market leg into the final 2016 bottom. The market is certainly going back into the 14,800 as it left a huge gap there, but a firm break below 14,600 will give us a confirmation that the bear is back.
What’s more, my timing work is giving me further confirmations that September 2013 was indeed the top. I will discuss these points over the next few weeks, but there are clear mathematical points of force that lead me to believe that a higher top on the DOW over the next couple of months is highly improbable.
At the same time we cannot yet ignore the technical picture. As such, I continue to advise you to maintain LONG/HOLD position while waiting for a confirmation that the bear market has indeed started.
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