IMPORTANT UPDATE ON THE BROAD STOCK MARKET (11:30 pm EDT)
It is now clear that we have started a new medium-term cycle in the broad stock market with the lows on April 17 (37,611 in the DOW) and April 19 (4,953 in the S&P 500 and 15,223 in the NASDAQ). The big question now is whether or not this new cycle will be bullish. This one is starting out bullish, like all new cycles, but we have to keep in mind that there is a longer-term - 4 year - cycle that is due to peak by the end of August (maybe even by the end of this month) and then fall to it's final bottom sometime between Sept. 2024 - June 2025. That fall should be substantial (between 16 - 26%). If we are also near the end of an even bigger cycle - the 90 year cycle - then that correction could drag on longer and be much greater (i.e. a major crash of up to 90%).
With corrections of such potential magnitude just ahead, we clearly need to be cautious about buying into this market. Very conservative long-term traders (investors) will most likely want to stay on the sidelines for now as they wait for a final signal to sell short for at least a 16--26% profit going down. But there may be good reasons for more active (and more risk tolerant) traders to consider buying soon. All three of our indices are now in the time frame for a substantial sub-cycle correction (the first in the new medium-term cycle). Because we are making new all-time highs in the center of a strong general reversal zone (May 13 - May 25), that correction could be imminent, and we would expect it to at least test the 15-day and/or 45-day moving averages. A modest corrective drop could be the springboard for another strong rally to new all-time highs - a rally that has the potential to go parabolic as it approaches the final top of a 4-year cycle. The DOW could get to 41,000- 42,000 and the S&P 500 to 5,800-6,000 very quickly.
The alternative (more bearish) possibility could see this market encountering resistance at the current all-time highs, with the DOW and S&P 500 making bearish "double-top" formations to their highs from March. We will watch this market very carefully now as we consider a possible short-term buying opportunity. If we miss it (or decide it is too risky), we will stay on the sidelines and wait to sell short the top of a 4-year cycle between now and August. We are currently on the sidelines of the broad stock market.
It is now clear that we have started a new medium-term cycle in the broad stock market with the lows on April 17 (37,611 in the DOW) and April 19 (4,953 in the S&P 500 and 15,223 in the NASDAQ). The big question now is whether or not this new cycle will be bullish. This one is starting out bullish, like all new cycles, but we have to keep in mind that there is a longer-term - 4 year - cycle that is due to peak by the end of August (maybe even by the end of this month) and then fall to it's final bottom sometime between Sept. 2024 - June 2025. That fall should be substantial (between 16 - 26%). If we are also near the end of an even bigger cycle - the 90 year cycle - then that correction could drag on longer and be much greater (i.e. a major crash of up to 90%).
With corrections of such potential magnitude just ahead, we clearly need to be cautious about buying into this market. Very conservative long-term traders (investors) will most likely want to stay on the sidelines for now as they wait for a final signal to sell short for at least a 16--26% profit going down. But there may be good reasons for more active (and more risk tolerant) traders to consider buying soon. All three of our indices are now in the time frame for a substantial sub-cycle correction (the first in the new medium-term cycle). Because we are making new all-time highs in the center of a strong general reversal zone (May 13 - May 25), that correction could be imminent, and we would expect it to at least test the 15-day and/or 45-day moving averages. A modest corrective drop could be the springboard for another strong rally to new all-time highs - a rally that has the potential to go parabolic as it approaches the final top of a 4-year cycle. The DOW could get to 41,000- 42,000 and the S&P 500 to 5,800-6,000 very quickly.
The alternative (more bearish) possibility could see this market encountering resistance at the current all-time highs, with the DOW and S&P 500 making bearish "double-top" formations to their highs from March. We will watch this market very carefully now as we consider a possible short-term buying opportunity. If we miss it (or decide it is too risky), we will stay on the sidelines and wait to sell short the top of a 4-year cycle between now and August. We are currently on the sidelines of the broad stock market.
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