A fairly uneventful and flat day, with the Dow Jones down -30 points (-0.19%) and the Nasdaq up +10 points (0.24%).
The talk of the bottom and continuation of the bull market continue to intensify. Technically speaking “they” might be right. After all, the long-term trend for the Dow Jones continues to be overwhelmingly bullish. The correction we have experienced since the start of the move can (for now)be classified as a typical correction. After all, the move from 16,588 on December 31st, 2013 to 15,370 on February 5th, didn’t really break any important levels. According to the bulls we are in the first few innings of a “multigenerational” bull market.
Yet, the bears are ready and hungry. Of course, the fundamental thesis is right on the money. The rally we have experienced over the last few years has been fueled by credit and speculation. Driving most asset classes (stocks, bonds, real estate, etc..) into an extremely overvalued range. While most bears point to 2007 top in comparison, anticipating a 50-60% slide over a short period of time, other bears go even further. Predicting a complete 1929-32 depression style type of a collapse where guns, ammo and tuna cans become your best investments.
Who is right?
No one. At least based on my mathematical work. Remember, it is the stock markets job to confuse as many people as humanly possible. Point being, my work shows that the stock market will drive both bulls and bears up the wall over the next couple of years. Every time the market dives, vindicating shorts over a certain amount of time and suggesting that the bear market/collapse is now in place, it will then turn around and stage a massive rally. Leading bulls to believe that the bull is back. Rinse and repeat.
The structure of the upcoming bear move 2014-2017 will be very similar to that of January 2000 – March 2003 on the Dow Jones. (not Nasdaq). That is why proper timing of up and down moves over the next few years will become so incredibly important. Identifying the point of force (turning point) and then riding it up or down in whatever direction it points will yield the best results…..
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There is a couple of things we have to consider.
1. The Dow Jones left two gaping holes on the way down. All the way up to XXXX. Not always, but typically, the market moves to close such gaps before any directional move (up or down) can take place. Our mathematical work showed that the market topped out on December 31st, 2013 at 16,588. Meaning, the market must close the gaps before rolling over and attempting a sustained bear market move. So, is it going to XXXX over the next few weeks? As of today, it is too early to say due to too many interference patterns, but it is highly probable.
2. The next important TIME turning point we have is February XXXX. Followed by a number of significant turning points in March. This yields a number of possible scenarios. Most probable of which is as follows…..
(Missing portion. Would you like to see the exact points of force in both price and time? Plus, what you should do. Please Click Here to +Subscribe to our premium service above).
CONCLUSION & POSITIONING:
While the scenario above is highly probable, we must implement proper trading positioning, in case it is not. Positioning below is as per DOW Jones (not to be applied to individual stocks). As such….
If No Position: XXXX
If Long: XXXX
If Short: XXXX
Please Note: XXXX is available to our premium subscribers in our + Subscriber Section
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Stock Market Update. InvestWithAlex.com February 12th, 2014 Google