As if making consistent profits in the stock market isn’t hard enough and as if we don’t have enough to think about, like global economic trends, Fed-Induced interest rate price-fixing, country-specific (especially ours) national debts that are approaching numbers so large that it is all but impossible to grasp, regulatory constraints that seem designed to keep the pie from ever growing, wars and rumors of wars, a completely dysfunctional US government, with a Congress half (or more) full of political hacks more interested in the destruction of the opposite party than governing… speaking of which… is there going to be ANY year in which the President is going to actually govern instead of campaigning… but I digress… to where now we have to consider the fact that confiscation of wealth (not just income) is in the purview of the greedy hands of political power (e.g., the recent attempt to confiscate up to nearly 10% of Cypriot depositor accounts).
And, just so you don’t think this hasn’t got anything to do with the stock market or your wealth, just look at how the market went through multiple knee-jerk reactions to the on-again-off-again Cyprus bank account confiscation fiasco. As for our government doing something similar?? It’s already being done through a rather cleverly hidden component of Obama-Care, where the Government levies an additional tax on the sale of your home if you meet the law’s guidelines for income and net gain on the sale.
As for the market and where it is headed… Here’s my take:
- First of all, I am about 90% long the market right now, so needless to say, I am bullish. But… and this is important… I have an exit strategy on every position, with most positions having 3 trip-wires that can trigger a sale:
- Weekly adjusted stop limit
- Target upside exit price
- Exit date
- Next, it is important to understand that as good as my forecasting tools are (and, without sounding too self-serving, they are the best forecasting tools in the business), they cannot predict exogenous events. The world is replete with exogenous (one-off) events; most of which are SG-driven (SG=”Stupid Government”). As such, I only care about the next 90 days and I trade accordingly. I always assume some event is going to roil the markets and move one segment or the other out of a ‘steady-state’ condition. I like to stay light on my feet and look for strong trends that are forecast to last at least a month or more. I get in; get out; pocket the profits and look for another opportunity using my technical, fundamental and forecasting tools (see www.cycleprophet.com.)
- At the moment, the US market looks mostly neutral to slightly bullish. The outlier is the NASDAQ, which looks to be the strongest index for the next 90 days.
- Emerging Markets look weak into the first of May, followed by a decent rebound.
- Australia looks like it could rally a bit for a few weeks before losing it all back, finishing up 90 days from now about where it is today.
- Canada looks to have a decent run higher for the next 90 days.
- Japan looks to be topping and could head quite a bit lower between now and mid-June.
- Europe, amazingly, looks pretty strong as an index.
Keep in mind I will be launching my “Free Trade of the Week” in very soon right here on Equities.com. This is a totally free service where I give you my best pick every week using my rules, tools and strategies. This is another awesome service provided by Equities.com and one that could add some serious value to your analysis process.
Have a great week!
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