We have been spot on with our market predictions for many months now and we have said calling a market top is never easy but we may be on to something. We have been giving specific upside targets for all of the indexes that have been nailed by the bulls on the move higher but over the last few weeks we have been stressing downside targets as well.
Last week’s tight trading range was also a good read that a big move was forthcoming but we still need to be careful we don’t overtrade as the bulls have shown an uncanny ability to frustrate the bears all winter long. If this market does what we think could happen then there could be a substantial amount of money to be made by playing the downside.
For those of you that get nervous and don’t know how to play a declining market, we are here to help walk you through the process. Bear markets can be ferocious and we have talked about stair-climbing and elevator-dropping and we are hoping we get that chance to play some put options.
We also called last year’s early pullback but that trend change didn’t come until mid-March and we will need to see a few more specifics before going all-in. While past results are no future guarantee of course, we are proud to say we recommended 38-out-of-39 winners from late March until mid-May in 2012 and we would love to see that windfall come back around.
The bears are pushing the action lower as we head to press. The Dow is down 75 points to 13,852 while the S&P 500 is lower by 11 points to 1,500. The Nasdaq is off 37 points to 3,126 while the Russell 2000 is declining 9 points to 904. The S&P Volatility Index is up 1.14 to 15.82.
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