Even My Bullish Forecast Wasn’t Bullish Enough
Three weeks ago as the stock market was being labeled as “in collapse”, I wrote about the bottom being formed and offered two scenarios for the market to follow. Of course, both scenarios were generally bullish, each ending at new highs, but the length of time varied. Below you can see that same chart updated with market action over the last three weeks.
In short, the stock market responded even more bullishly than my very bullish forecast with all time highs being achieved in a matter of weeks from what was being called “the end of the bull market” and a “total game changer of a decline”.
Today, the Dow, S&P 500 and Nasdaq 100 are behaving very well with fresh highs occurring on an almost daily basis. The S&P 400 and Russell 2000, however, are lagging and need to step up sooner than later or risk will once again grow for a 4-8% pullback.
As I have said ad nauseum for several years, the bull market remains alive. It is old by historical standards, but bull markets do not die from old age. They die from a host of other factors, usually including mistakes made.
When you see a vertical rally like what’s been happening since mid October with so many caught off guard, some profit taking is naturally to be expected. However, with so many on the outside looking in, especially with the sprint to year-end, any weakness should be temporary and short-lived. Until proven otherwise, dips are buying opportunities.
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