Bear market? LOL just kidding. While the perma bears will again try to call a top we are just getting a normal profit taking event. The same as February. I tend to think this will morph into a larger degree intermediate cycle decline, which should mean there will be a second leg down after a bounce out of this initial drop.
At this point we’ll probably print a temporary bottom sometime later this week and then rally into the 4th of July holiday. After that I’ll be looking for a lower low into the middle of July. If this plays out like I’m now expecting, that bottom in July should be the final buying opportunity before the Nasdaq starts the run to 10,000 by the middle of next year. We’ve spent the first half of this year stuck in a difficult consolidation which was the default scenario if the parabolic move failed to follow through. Price is churning sideways allowing the long term moving averages some time to “catch up”.
Just like the metals right now, I will be the only one calling for a bottom at the time. Most analysts will be predicting a bear market … just like they were in February. And they will be wrong again… just like they were in February.
Get ready, we’re going to get a buying opportunity in stocks soon just like we’re getting a buying opportunity in the metals now.