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Inside Market View: Interview And Analysis On The Next Major Move



February 11, 2014 – Comments (2)

The market continues to move higher, its fourth day in a row. After panic was everywhere just last Wednesday, euphoria is emerging today. The market swings continue to befuddle the average investors as well as many Wall Street pros.

Below I will reveal the questions I asked and the answers he gave.

1. This is a monster bounce in the market and many are becoming bulls again. Is there more upside to come?

Answer: The markets are near another top. Technically speaking, we approaching a gap fill on the daily S&P 500 chart as well as slamming into the daily 50 moving average. A pullback may start as early as tomorrow. I have sold a majority of my longs on this bounce for a great gain while finally today, starting to accumulate some shorts.

2. So you do not think the markets will hit new all time highs in 2014?

Answer: We are less than 2% away from the all-time highs. However, I would be somewhat surprised if the markets can get to all time highs and hold it. Perhaps they briefly test it, but that is all. We have to recognize that the drugs being pumped into the stock market are coming to a close. The Federal Reserve is pulling back on its money printing ways. This was one of the major reasons why the stock market has risen so much since the lows of 2009. Just that uncertainty alone will mean the markets will be on shaky ground. In addition, currently the technical charts do not support that a move much higher than this area.

3. How should the average investor play this market? I get the feeling most investors feel whipped in 2014.

Answer: That makes total sense. Just as they all were going long at the end of 2013, the rug was pulled out from under them. This is what the institutions pride themselves on doing. Whipping the little investor in and out, essentially taking their money. Always remember, the stock market is a transfer of wealth from those with less knowledge on the 'game' to those that know the game. I truly try and help every average investor learn the game so they are not on the wrong side of the market.

Average investors should be using this market bounce as a selling opportunity. I cannot stress it enough that this market action is identical to what happened in 2007 and in 2000. The declines that followed were epic. We project that 2014 will be a whippy year with some downside but 2015 is the big down year per cycle analysis. This bounce is a gift to the average investor, allowing them to sell near the all time highs. The funny thing is, this bounce is what will coax more small investors to jump in the market, putting them on the wrong side of the trade. The games that are played on Wall Street will blow your mind.

This concludes my interview with Chief Market Strategist Gareth Soloway. I will periodically touch base with him in the future and get his updated views for everyone. Stay tuned.

Bryan Leighton   

2 Comments – Post Your Own

#1) On February 11, 2014 at 7:43 PM, awallejr (38.34) wrote:

Gareth now dictating?  Last year he kept predicting a market crash only to see the market rise 30%.  If he makes this an annual call eventually he will be right I suppose.

If his thesis is tapering, well the market has been rising as QE has been shrinking.  So many people still don't understand QE, Gareth being no exception.  

The Federal Reserve is pulling back on its money printing ways. This was one of the major reasons why the stock market has risen so much since the lows of 2009.

Low Interest rates and assuring liquidity were the main drivers.  It allowed many to deleverage into cheaper debt, including the Federal Government, and help build up corporate balance sheets.

Tapering will put some upward pressure on interest rates I suspect but not to the numbers we saw in late 70s-80s. Other than that it is the Federal Funds rate that we need to watch.  And Aunt Janet has stated the Fed expects to keep it low.

So where will all that cash pulled out from the market as would happen during your predicted crash go to?  Under a mattress? You want 1% in a CD? Gold?

Now had you listened to my suggestions here the last five years (free of charge) you would have a solid income producing portfolio where you would actually look forward to corrections so you can redeploy that income.

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#2) On February 11, 2014 at 11:24 PM, awallejr (38.34) wrote:

Just for the record Gareth I don't think you a terrible prognosticator.  My problem is that you tend to confuse macro and micro issues.  I thought your recent blog here was actually pretty good from a short term TA perspective:

But while short term TA has its value, long term TA is worthless.  Binve, God bless his soul, posted constant long term TA charts years ago, except the problem was they never turned out to be right.

I am sure there are "tricks of the trade" that might work from time to time, but long term is a whole different ballgame.

I don't mind reading short term TA calls, but please stop with these "the market will crash" blogs because all you do is hurt people long run.  Cramer smiles with glee on his October 2008 call telling people don't invest 5 years worth of  "expense" money, except the RIGHT call, as history has proven, was to invest hard during the next few months and to buy and hold.

Keep giving micro calls, but stop with the macro "doom and gloom."


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