As I alluded to in my previous report
both stocks and gold are due to mean revert. Short-term the stock market
is getting significantly oversold and if we get a down day tomorrow I
would expect some kind of bounce off of the 1600 level. If that bounce
fails and we break below last Thursday's low it should confirm that
stocks have begun an intermediate degree correction.
Since I think there is significant
risk that the cyclical bull market that started in 2009 is now topping I
would take a break of the $1600 level as confirmation that an
intermediate level decline has begun. Based on how artificially far the Fed
has driven this rally, this should be a quite significant decline,
possibly even filling the gap from January 2.
If one has retirement funds invested
in the general stock market I think after four years and a 153% gain
it's probably time to say "close enough" and exit this Frankenstein
monster of a market that the Fed has created.
