Dow 30: Five DOWN, Twenty-Five to Go!

January 2nd, 2014

by Steven Bauer

Advisor Perspectives welcomes guest contributions. The views presented here do not necessarily represent those of Advisor Perspectives.

My 50+ Year Logo is: "Investing Wisely."

Believe it or not, this is one of my very best ways to identify Bullish and Bearish Inflection Points. It is simple mathematics with no gimmicks or formulas to learn to follow. It is a matter of having the patience and discipline to monitor these BIG GUYs. And as they Cycle from Bullish to Bearish and back again to Bullish, I simple keep the Dow 30 - Industrials "Count" in perspective.

Right now, the 'Down Count' is too small to change my Opinion from Bullish to Bearish. Forecasting as I do on a continuous basis, six months ago there was only one 'Down Count' and six months from now, my Forecast suggests that there will have been enough 'Down Counts' to have turned the Dow 30 Industrials – Bearish. I'll keep you posted.

I'm using the "The Dogs of the Dow" as an example to demonstrate how I go about managing assets profitably.

(Please understand that there are almost ALWAYS lower risk Companies with a much Higher Probability of Profit than these Dow 30 Component Companies. My Job is to Know Which).

Within any group, including all securities on the planet, there are the Favorable, the Un-Favorable, and the "Also-Rans." The latter are of no interest to me until they rotate-completely into or out of "Favor." (See the notes in the table below.)

My Methodology is unique, and it is turning Bearish even though the Dow 30 Industrial Index is turning in repeated new highs.

The table below is designed as a teaching, tool but is both current and accurate. I hope you will want to study it very carefully.

You will note the title has notable meaning and comes from Kenny Rodgers' song – The Gambler (click to listen).

You got to know when to hold 'em, know when to fold 'em,

Know when to walk away and know when to run.


Forecast for the General U.S. Stock Market

This week (so far) the General Market is down but has been bouncing off of its highs. That's OK if you are looking for a Bearish Short-Term Inflection Point – and I am. It only means that I / YOU must remain patient and wait for my composite technical indicators to do their thing. Believe me … my fundamental indicators have been in place for weeks. I am very prepared and confident with my pending Formal Recommendations to my Clients.

This is a mini or bounce rally in the making for perhaps today and Friday, after which I expect to see further confirmation of my Bearish Short-Term Forecast.

At this time, I am primarily holding Cash and am focused on a Topping and very likely a new Bearish Inflection Point … or, if you prefer, a new / meaningful Bearish Cycle.

For the Near-Term (one day to thirty days): A mini or bounce Rally is in the making. The Bulls are very close to running out of the euphoric attempts to move the General Market UP. There has been very little convincing evidence (Economically or Fundamentally) that the current rally will be sustained. The coming days and perhaps a couple / few weeks will be a very fun time for me to once again fully test my 50+ year Methodology of "Investing Wisely."

For the Short-Term (one month to three months): Topping is over-due, but the coming few days of trading will be an excellent time to do my Analytics homework very diligently using all my many Indices to find the necessary "Confirmation" that the Bulls are at least dying and / or perhaps already dead.

You might want to visit my Personal Blog – I publish at least a couple per week: Stay tuned.

Let me know if I can help:

Smile, Have Fun, Investing Wisely,

Dr. Steve

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