This past weeks stock market action may have indicated the start of a much needed correction in the equity markets.
If so this could be just a minor 15% correction to up trending technical support lines; or at worst if one follows Elliott Wave Theory, Peter Grandich, Danielle Park's thoughts, and others; this could be the start of a major bear market correction of 40-50% within the secular 20Year Bear Market.
Perhaps the attached long term chart of the SP500 will give some perspective of where we have been the last 14 years and provide some key levels and indicators I am watching to determine if this will just be a normal 10-15% correction within an ongoing Bull Market; or will key technical chart support levels be broken to the downside indicating a much more severe washout in stocks.
Investment wise I remain long the US dollar and short the Euro and the DJI and longCanadian dollars parked short term for buying opportunities.
I continue to follow Danielle Park on her "Juggling Dynamite" web site, and attend her presentations when she is in Vancouver (most recently at the Vancouver Resource Investment Conference Sunday 19Jan2014).
Cash is a position. One does not need to be fully invested as some investment advisors promote as their own and your investment mandate.
Preservation of capital is an important part of portfolio management. There is no clear consensus re: Are we headed for Deflation or Inflation??
Click to enlarge.
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