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Year-End Rally

Typically at final tops is an oversold rally among the Dow Components and flagship stocks that 'juice' the broad averages higher, but few of these individual names actually make new stock highs. The implication is that investors will hit the 'EXITS' just prior to the 'you know what' hits the fan, but suckers in the public for what they feel is 'a runaway move'. This course of action is identically repeated just weeks before the end of a major top - simply because it takes a great deal of time for institutions to unload blocks of millions of shares to those buying in at these euphoric levels.

The illogical nature of the stock market should remind us that there always comes a time when investors will forcibly convince themselves (under some unfounded reason) - to gobble up shares of any company, not knowing the stock is rising - because it's being squeezed for its every last penny! This certainly is the case with Apple, Google, and Amazon. But of course, they will top out just before or with the market as I previously explained.

Fortunately, there is still plenty of time before any of these meaningful signs of trouble - bubble to the surface. And while there are subtle warnings that are current, they do not provide any serious sign to worry, at least not yet.

Simply put, the stock market is set in motion to resume its year-end uptrend before the culmination of this four year Bull market cycle. And soon after this current decline bottoms out, it will be the very last worthwhile position for longs to accumulate shares into the final quarter.

 


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