What goes up, must come down.
The S&P 500 over the past seven trading days, has displayed a classic triple top, when measured on a daily basis. With the various moving averages crossing negative and the S&P 500 drifting lower, it appears the market will correct, but to what levels?
I do believe the lows are in this time around. However, this correction, could and probably will approach the March lows. At the completion of this correction, we will have a once in a lifetime opportunity to buy the markets at historically low levels.
We are still in a secular bear market, which started in 1998 or 1999 and as history has shown us before. These periods of contraction tend to last on average, 17 years plus or minus. In other words, when all is said and done, tighten your seat belt. As we going down again. But for today's trading, and I want to emphasize trading, and not long-term investing. It is important to understand that the market will offer many opportunities to be long or short in our quest to rebuild our investments.
This trade, like all trades are just that, a trade. Please don't bet the farm. You may lose it. Many of the strategies that I will talk about in my blog will be similar to how a poker player plans out and assesses his opponents. The idea is very simply, play the odds that are most favorable to you. You have to know when to fold.
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