I have been bullish about stock markets since 2011 and is still expecting a new high in 2015. But as we get into a major Cycle Peak soon, I would be very cautious as I tad along this year.
Is it possible for the DOW to drop 30%-50% within the next 15 months? Why not if all economic lies are exposed. As a technical trader with a market timing tool, I am not concerned at all if the market crashes again in 2015-2016 as:
1. I believe I should be able to get my members out of the market crash before it actually happens…thanks to my unique timing analysis plus the other 3 strong elements of analysis-Fundamental, technical and Sentiment
2. Not only avoiding crash and a potential big loss, we should be able to use the opportunity to profit from shorting the markets.
The crash is possible:
1. Inflated value of stocks (despite falling profits margin) will reach the tipping point in the midst of the false economy’s prosperity. American economy (like the messy Europe now) is heading for a reset – into reality. U.S economy can’t grow alone without the driving forces from Europe, Japan and China.
2. The decades of borrowing and printing money, racking up an unsustainable $18 trillion debt is inviting a real trouble. In the event of expected rate hike in September, the U.S. government is facing the problem to pay the creditors. Default may be on the card.
3. Confidence Crisis in U.S. government
However, based on the Cycle Timing and Capital flows, we still can see the DOW, SPX and NDX going higher in the next few months before the sunset that may begin in DOW.
Meanwhile, enjoy the ride but if you are a short term trader, it is about time to take at least 50% profits off the table if you see 2130-2150 in the next few days. I expect a quick and sharp corrective decline for SPX to hit 2030-2060 (from 2150 peak) into mid-April before heading higher.