The buying opportunity in the stock market that I alluded to several days ago came and went quick. That was one of the mildest DCL’s I’ve seen in a while. I’ve got to think the next stop is 8000 on the Nasdaq, probably by the time we get to earnings season.
A deeper correction should come in August or early September. But first we need to create some real complacency in the markets. Complacency triggers corrections. Corrections clear sentiment and are the fuel for rallies.
A contrarian understands this. This is why at turning points I’m always doing the opposite of the crowd. I would even go so far as to say the only real way to make sustainable long term gains is by being a contrarian. It’s why the SMT portfolios are consistently growing over time even though we certainly don’t win on every trade we make.