5/18/2015 – An up day with the Dow Jones up 25 points (+0.14%) and the Nasdaq up 30 points (+0.60%).
“Sell in May and go away” is one of those well know Wall Street “truths”. Unfortunately, it didn’t work last year. Instead, the market had a fairly good rally between May 21st and July 17th of 2014. Will it work this year? Let’s take a look.
35 months. That’s about how long it’s been since the market pulled back at least 10%, which is an eyebrow-raising stretch of time. Take a look at the market each year going back to 1980 and you’ll find that the S&P 500 has averaged an intra-year drop of a little over 14%. Yet, here we are approaching three full years of a largely uninterrupted climb.
With the stock market trading at or near all-time highs, the chief U.S. equity strategist Deutsche Bank said Friday he would not chase this rally.
Today, most investors are fast asleep. They shouldn’t be. The market is at its utmost dangerous when most people don’t anticipate a correction. Which is the case today.
As I have illustrated here so many times before, most investors are overwhelmingly bullish. Even though the stock market hasn’t gone anywhere since July of 2014 (NYSE). Further, we have faced a similar market setup/situation last summer. Range bound market, compressing wedge, everyone was fast asleep, etc… That was followed by July and September/October corrections.
Think of today’s trading range as if Mr. Market is accumulating energy for its next move higher or lower. Just as if a spring was compressed and then let go. So, will the market breakout to new all time highs or are we on verge of a big sell-off? I believe we will soon find out. One thing is certain, this period of low volatility is coming to an end.
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. May 18th, 2015 InvestWithAlex.com
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