We seem to be witnessing a battle between two sets of indicators at the moment, each with its own opinion on which way the market is headed.
On the one hand, as we have been expecting, our Long-Term Master Key has dropped below -80%, which is a “sell” signal. On the other hand, we have a lot of technical and economic evidence that argues against a sharp fall in the market.
In your last update, we explained why a so-called “sell” signal in the Long-Term Master Key would not send us into a panic mode. Before you start dumping good stocks, let's review the situation.
In the first place, the market has already retreated significantly from its highs last fall, perhaps in anticipation of this week's “sell” signal. So prices today are quite reasonable.
We should also remind you that there's nothing magical about the -80% figure. It's just a rule of thumb based on historical data. But we can't really say that there's much difference between -80% and -79%.Read more...
