I wouldn’t be a normal human being if the strength of the stock market rally didn’t make me worry that my long term outlook for a bear market is wrong.
Clearly the 10-12 month cycle has turned, and that could be good for a bullish phase lasting a few months. It doesn’t guarantee that the market will break out above 2816, but the conditions are there.
If this is a big cycle turn, then the longer term indicators are huge laggards. So be it. They would be late in confirming, but once they have, then we could be more comfortable about buying the dips.
I’m skeptical that that could happen without the Fed reversing policy in fact, as opposed to simply talking about it.
Meanwhile, we know that since the Big 3 central banks are no longer creating the liquidity to fuel a rally, that this one is being fueled by the expansion of debt. Conventional investment funds are depleting whatever cash they have. Hedge funds and dealers are using increased leverage to bid up prices.
These processes are not sustainable without the backstop of QE. So for better or for worse, my conclusion is that without the central banks restarting QE, this rally will end violently. For now, I must continue to recommend not chasing this market for longer term investments. If that changes, there will be lower risk entry points available, and I will make it a point to look for and report those.
In the meantime, I recommend seeking short term profits using limited capital to trade options regardless of the market’s direction. Our gurus here at Money Map Press can provide you with a constant flow of high potential options trades.
The moneymaking power doesn’t stop (even when the market drops)