Emotional euphoria is not a sign of renewed bullish moves. Most deep corrections and crashes, barring external shock events, occur when earnings and momentum seems intact. If we rally till next quarterly reporting season watch the CEO's statement on future expectations. It is not the current earnings numbers that matter since they are already baked in.
I have stated from the beginning that I see this as wave 3 of 5. Wave 4, if correct, can last 5 or so months and drop some 20 percent. Watch the 10 year note. Above 3 percent and it spells short term trouble. Wages and rates are the key to corporate profits and productivity.
This last move up is very long in historic standards without some corrective move. Odds favor a decent drop coming soon. I still see 2020 - 2070 as upper bounds on SPX. I had always hoped it happens in October since that is one of 2 months that have been known to start sharp corrections.
Never stay with a premise if it has been proven wrong. Always adjust your position and try to understand the factors that caused the mistake.
If we do see a steep move up it should seal the fate for me. Jumping in to this market now, missing the last 6 years might be a mistake. Patience is needed. Never think you will be shut out of the market if you wait too long. Look at P/E ratio's and bond yields. Since yields have very little room on the downside and seems to have hit bottom the P/E ration becomes all the more important.
AI
