As to the stock market, here’s the way I see it.
The market is in a correction. We’ve been telling you that for weeks and it became QUITE clear to most people when the Dow plummeted more than 1,000 points mid-day last Thursday.
Today we had a great rebound, and while that helps to repair some of last week’s damage, by no means does it mean the correction is over. To me, it seems the market is acting no more sensibly today than a bunch of six-year-olds playing soccer, who rush from end to end of the field en masse.
So what comes next?
Well, I think the correction has farther to go. Mainly, I think we need more TIME for a sense of malaise to spread among investors.
So I’m continuing to recommend that you be cautious, and build up your cash reserves, so you have some ammunition to use once the market bottoms.
But I’m confident that once this correction runs its course, the market will resume its major uptrend, and even break out to new highs. And that’s not blind optimism talking; it’s a disciplined interpretation of our time-tested market timing indicators.
You can get the full explanation behind this optimistic reading in the latest issue of Cabot Market Letter, edited by Michael Cintolo.
For more information, click here.