My Seriously rediculous Prediction

My Seriously ridiculous Prediction

Yes! ok, lets face it, no one knows where the market is going to go next, and this is true, but lets face another TRUTH here.

The S&P is almot 1100pts above lows sent back in 2009 when this bull market began. We are now in new territory, and multiples and ratio's are still low for my liking, and this means, there is a GOOD chance this market will rally up higher soon.

YES! I have been taking my meds, and thanks for asking LOL...

But 2013 has been a painful year for bears, and if you are one of them who keeps trying to short this market and losing out then you will not like what I am about to say....

Check out the monthly chart below...

While some might say this is a chart about to crash, or this chart is doing nothing. I would disagree, anytime I have seen a monthly chart like this in my 15 years trading, it normally means the market over the longer term is ABOUT TO GO HIGHER!

You can see just how bad it has been for the bears or those trying to short this market. OUCH! Even in the last 6 months this market has hardly seen a correction, they have been pretty pissy at best!

Like I said, in my own humble opinion somewhere in the next 2 years we should see 2000 - 2100 on the S&P. I know some people are going to laugh at that prediction, and in no way am I saying we skyrocket up to these levels quickly, of course there will be some corrections and bone crushing news that leave us hanging for a few weeks, however you must understand we are still in a bull market, and bears and those trying to short this market each week are only helping the cause to send us up higher, just like this week as the smart money keeps squeezing these bears out (and or their stops).

spx monthly chart

What the average trader out there is not realizing is that The Federal reserve are NOW BACKED INTO A CORNER, they have done it on purpose, and will be forced NOT TO TAPER anytime soon, if at all. YES!!! I am deadly serious about that. There is even a possibility the could increase stimulus. Wouldn't that go down well. But do not be surprised if this does indeed come to fruition.

There are cycles I have been looking at, hinting there is still 18 - 24 months of UPSIDE left in these markets that could end in the latter part of 2015.

Make no mistake, fighting the fed, is the quickest way to lose money in this market. So If QE is still ongoing to a large extent in 2014 & 2015 (QE across all of 2014 is now a given), do not be surprised to see this market KEEP GOING UP, AND UP, AND....UP!



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The SPX monthly Chart - Interesting spx monthly chart

For the last 13 or so years, the market has just been in a large sidways range. Below we have highlighted the peaks and the troughs and you will notice how the SPX prices over the last decade have hit heavy resistance and support.

The SPX monthly Chart below is showing we are in a bull market, however there are historical values that are popping its head up. There is a saying that history does repeat itself. And we can see that it has done so a few times on this chart.

Right now on the S&P we see prices are back up at the resistance area, and there seems to be no harm done. Or is there????

It is safe to say on a longer term level, the market has done nothing but to go sideways, taking investors for a wild ride and leaving other investors with no money, just leaving them on the sidelines, scratching their head to wonder what just happened.

Right now investors are scratching their  heads, wondering what to do,  as we are up at significant resistance levels. 

The mentality out there is this :-

BULLS : They think the market will go to the moon by next Wednesday, but are afraid to join this rally too late.

BEARS : They keep trying to short the market and get burnt britches each time. Psychologically they feel that there is a secret group on the market working against them. :-P

spx monthly chart

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sp 500 historical chart - spx monthly chart

sp 500 historical chart - spx monthly chart

Lets take a quick trip down memory lane! The sp 500 historical chart or spx monthly chart we can zoom back and take a look at the market on a more longer term view. It is not a waist of an exercise as you will see.

The spx monthly chart tells a very interesting story.

sp 500 historical chart - spx monthly chart

You can see after the DOT COM crash we bottomed out in 2003 and this signaled the start of a nice bull run that lasted several years.

Next you will remember the start of the financial crisis in 2008 and the market crashed back down below the lows of the DOT COM crash.

Since 2009 the market bottomed and has not looked back since, we have been in a very healthy bull market since then.

Alot of analysts are looking at this spx monthly chart and warning of another market crash, because they are comparing the recent highs to the last two highs seen in the last decade or so, and are adamant that we are about to crash or see the same pattern we have seen in every time we get up to these heavy resistance levels.

Now that is a good analogy, but the market does not work like that. It is an eating, breathing, sleeping dragon and in all my years trading and watching the market I have learnt to always expect the unexpected.

Right now is far to early to start contemplating what COULD happen because we are still in a BULL market. There are no signs telling me this will stop tomorrow, next week or by next month. I am not saying a sell off is impossible, infact a nice sell off is overdue, I will be the first one to admit that, however we are in a bull market that started in 2009 and on a average they do not just stop one day and decide to turn around.

Right now is not the time to speculate and simply use support and resistance lines to pre-empt a crash or major sell off.

It is clear the market is still very healthy, and even if we see a large sell of this year in 2013, that will not change the overall picture that the market seems to very BULLISH right now. Its a two steps forward and one step back. Yes! Nothing goes up in a straight line! so even if we do see a nice correction occur in the months ahead, that will only add fuel to the fire that the bulls have been providing.



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