Sunday, January 24, 2016

Stock Market Action

As written in the previous blog dated 12/23/15 I mentioned that we would revisit the October 2015 lows.  As you can see the recent stock market correction brought us in line with that prediction.  While the recent stock market activity has been unsettling to say the least, it was a necessary move lower to allow the market to move significantly higher in the next 3 to 6 months.  While the stock market is not yet completed with the current move down the majority of the carnage has already occurred.

The market will move higher in the short term, but this is truly a dead cat bounce and should not be viewed as a sustainable rally.  The market will go back down and retest the lows after this bounce and probably make lower lows as well.  After this retest of the market lows you can feel confident in purchasing securities for a long term rise.  This next rise will bring us above the highs established in July 2015. The market rise will add roughly 3000 points to the Dow and approximately 250 points to the SP 500 index.  This rise will inflate the portfolios of anyone who has market linked securities.  I suggest you prepare yourself for this buying opportunity.