Get your stops and inverse ETFs ready -- we could be in for a bumpy ride! Or not ...
Confirmation of a move significantly higher in both the Dow and the Dow transportation averages, where both averages move to new highs would signal that this bull run still has some legs. This move could give way to a major top, just as it did in 2006 on similar moves. However, if one of the averages drops off noticeably now, while the other average surges on to new highs, an extreme amount of caution is warranted. Either way, an extreme amount of caution is warranted, since the data available at Shadowstats.com tells us that the rose colored glasses a lot of folks are wearing right now is not exactly warranted. In fact, it's when people start to get uber comfortable and excited that I start to get concerned that either mania-type top is fast approaching, and/or that a blow off is just around the corner.
We are at that point where patience and light commitment could mean the difference between some security and/or minor losses, and panic and/or major losses. Now is NOT the time to fall in love with your long positions. No one can anticipate what exactly will happen yet, but the signs should become clear over the next week or two.
Here is the updated chart to illustrate
Confirmation of a move significantly higher in both the Dow and the Dow transportation averages, where both averages move to new highs would signal that this bull run still has some legs. This move could give way to a major top, just as it did in 2006 on similar moves. However, if one of the averages drops off noticeably now, while the other average surges on to new highs, an extreme amount of caution is warranted. Either way, an extreme amount of caution is warranted, since the data available at Shadowstats.com tells us that the rose colored glasses a lot of folks are wearing right now is not exactly warranted. In fact, it's when people start to get uber comfortable and excited that I start to get concerned that either mania-type top is fast approaching, and/or that a blow off is just around the corner.
We are at that point where patience and light commitment could mean the difference between some security and/or minor losses, and panic and/or major losses. Now is NOT the time to fall in love with your long positions. No one can anticipate what exactly will happen yet, but the signs should become clear over the next week or two.
Here is the updated chart to illustrate
