UPDATE ON THE BROAD STOCK MARKET (11:30 pm EDT)
I apologize for going so long without a post. I try to post AT LEAST once per week, but recent personal business was very demanding of my time, and I did not post last week. Fortunately, the markets haven't made any dramatic moves recently. Because of all the political and geopolitical controversies raging these days, many markets seem indecisive as investors wait with bated breath for so many issues to be resolved, but many controversies are certainly NOT being resolved, at least not quickly.
In the broad stock market, we are now confident that a new medium-term cycle as well as a new longer-term 3-year cycle began in all three indices (DOW, S&P 500, NASDAQ) with their deep lows on April 7. These indices have been rallying strongly from there, but it is getting late in the medium-term cycle, and that means a final top is due to be followed by a 2 - 5 week correction to the cycle's final bottom. This medium-term cycle has been bullish (which is to be expected because it is very early in a new 3-year cycle), and it continued to rally past a strong reversal zone that ended last Friday. While we like to see significant tops (and bottoms) happen inside reversal zones, it doesn't happen all the time.
The NASDAQ made a new all-time high on Monday, the S&P 500 made a new all-time high today, and the DOW is VERY close to breaking its all-time high of 45,073 made in Dec. 2024 (it got to 45,016 today). This gives us a bearish divergence signal right now, but if the DOW can break just a little higher tomorrow, that bearish signal could be negated. If it isn't, we might see a sharp correction begin - possibly the final 2 - 5 week final correction for the current medium-term cycle. Because this market's trend continues to look bullish, we will probably look to buy the bottom of that correction.
I should point out here that it is also very late (16 years) into a long-term 18-year cycle in the broad stock market. This means a final long-term top could happen anytime and be followed by a very sharp drop (35% - 67%) and possibly even a larger drop (crash) if we are completing a very long-term 90-year cycle (the last one was the great crash of 1929). But for now, it looks like we could get another strong rally from the start of the next medium-term cycle into the end of the year. We note that final tops in long-term cycles are sometimes preceded by parabolic surges ("blow-off" tops), so it could be worth buying the bottom of any significant 2 - 5 week correction in the current medium-term cycle.
For now, I am remaining on the sidelines of the broad stock market.
I apologize for going so long without a post. I try to post AT LEAST once per week, but recent personal business was very demanding of my time, and I did not post last week. Fortunately, the markets haven't made any dramatic moves recently. Because of all the political and geopolitical controversies raging these days, many markets seem indecisive as investors wait with bated breath for so many issues to be resolved, but many controversies are certainly NOT being resolved, at least not quickly.
In the broad stock market, we are now confident that a new medium-term cycle as well as a new longer-term 3-year cycle began in all three indices (DOW, S&P 500, NASDAQ) with their deep lows on April 7. These indices have been rallying strongly from there, but it is getting late in the medium-term cycle, and that means a final top is due to be followed by a 2 - 5 week correction to the cycle's final bottom. This medium-term cycle has been bullish (which is to be expected because it is very early in a new 3-year cycle), and it continued to rally past a strong reversal zone that ended last Friday. While we like to see significant tops (and bottoms) happen inside reversal zones, it doesn't happen all the time.
The NASDAQ made a new all-time high on Monday, the S&P 500 made a new all-time high today, and the DOW is VERY close to breaking its all-time high of 45,073 made in Dec. 2024 (it got to 45,016 today). This gives us a bearish divergence signal right now, but if the DOW can break just a little higher tomorrow, that bearish signal could be negated. If it isn't, we might see a sharp correction begin - possibly the final 2 - 5 week final correction for the current medium-term cycle. Because this market's trend continues to look bullish, we will probably look to buy the bottom of that correction.
I should point out here that it is also very late (16 years) into a long-term 18-year cycle in the broad stock market. This means a final long-term top could happen anytime and be followed by a very sharp drop (35% - 67%) and possibly even a larger drop (crash) if we are completing a very long-term 90-year cycle (the last one was the great crash of 1929). But for now, it looks like we could get another strong rally from the start of the next medium-term cycle into the end of the year. We note that final tops in long-term cycles are sometimes preceded by parabolic surges ("blow-off" tops), so it could be worth buying the bottom of any significant 2 - 5 week correction in the current medium-term cycle.
For now, I am remaining on the sidelines of the broad stock market.
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