The Next Few Weeks Will Tell You If the Stock Market Is Dead or Alive for Certain - Mike Swanson (09/16/2016)
I have been telling people to take money off of the table and build some cash reserves for several weeks now, but most people do not think my warnings are valid.
Everyone on CNBC is bullish and there are predictions everywhere for big stock market gains.
The message they say is if you sell you will miss out.
In reality the only way to make money in the markets is to buy stocks when they drop and are cheap.
But most people end up doing the opposite and stay fully invested until they sell on big drops.
That's why the volume is always so big on bottoms and there is always panic and sickness.
To escape this you must have cash reserves to be able to buy on the panic instead of being one of the mass forced sellers.
But people want to hold and believe.
And it is hard for most people to accept warnings on the market much less sell when CNBC and just about everything they see on TV tells them everything is fine and not to worry.
In the next few weeks you will know for sure whether I am correct or whether the bubble bulls are correct.
All you need to do is pay attention to what happens and you will know for certain if the rally that started in February is dead.
So at the beginning of August I did a PDF report titled This Indicator May Determine the Future of Your Portfolio.
I said if that indicator diverges from the market by the end of August odds will favor a drop.
And it did just that and so the market dropped.
It wasn't a prediction it was knowing what signs to keep our eyes on!
In August I talked a lot about the 20-day Bollinger Bands and how the width between them narrowed to a point not seen in decades.
That told us a big move was going to come in September and that move started a week ago with a market breakdown.
Now bubble bulls are saying don't worry this is just a dip and everything is great.
I do not believe them and I think people who are still fully invested and are not sure now should sell when the S&P 500 goes below its recent 2120 support level.
But most won't do that and still won't be sure what is happening.
Well if you want certainty the stock market action the next two weeks will tell us for sure who is right.
Look at this chart.
The biggest thing right now that is happening is that the volatility in the stock market is increasing.
In a big bull rally you can get quick dips in the stock market that last a few days or even up to a week.
That is basically what happened with BREXIT.
Then afterwards the volatility goes away and the uptrend resumes.
So bubble bulls say that this is just a BREXIT buy all over again.
They say the stock market dipped a few days and support held at the S&P-500 2120 level so things are going back to normal.
In extended stock market drops though the stock market volatility and crazy swings do not just last a few days or a week, but go on and on.
What this means is very simple.
We are seeing the stock market go up and down with wild daily swings.
If the bulls are right the market will go back up by the end of next week and the crazy drop days you have seen that they say are temporary will stop happening.
If the bulls are wrong though these crazy down days will continue past next week.
If the bulls are wrong the current stock market support level of 2120 on the S&P and 18000 on the DOW will also be broken and the market will make another leg down to its next support level.
If the market does that and you keep seeing the crazy swings continue beyond next week then you will know that the market is in a real stock market downtrend and that it will be imperative for you to take money off the table and build cash reserves if you have not already done so.
If the bulls are wrong people who keep believing in their predictions will keep losing money.
You have all of the tools you need to be able to make good decisions and adjust and adapt to any changes in the stock market trend even if you have doubts on what is happening now.
You can trust your own judgment and not just obey people on TV just because they are on TV who couldn't even see a pullback coming.
You do not need someone to tell you what to do, because you have a mind of your own!
Yes I still have some long core positions and even some in junior mining stocks, but I believe the stock market is going to decline over the next few weeks if not months (more likely in my view) and that is why I am betting against stocks right now heavily.
Most people though are fully invested in the stock market and now even bonds are trending down.
You may want to take a look at your portfolio and apply relative strength investing strategies to figure out what to sell.
CASH RESERVES - RAISE THEM - SO YOU CAN BUY LATER AT LOWER PRICES.
This weekend will be doing an update on gold next week weeks for private Power Investor members.
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