New Market High – No Speedbumps Ahead. Move Your Stop Up and Ride the Wave

December 23, 2013

We’ve had a great run this year and you should be making a ton of money if you followed the game plan last week. Please share your success on Investimonials. To post a review CLICK HERE. With a few more votes I should be able to reach the #1 spot – please help me reach my goal.

The market broke out to a new all-time high last Friday and it is continuing to push higher this morning. All of the clouds have parted and this rally should continue right into 2014. The biggest threat is that it gets ahead of itself. We are not there yet so stay long.

Global economic conditions are good. The biggest catalyst could be Europe. Their flash PMI’s were better than expected and the recession in the EU has weighed on the market for years.

The Fed tapered and they will keep their ZRIP intact for many years. Central banks around the world are printing money like mad and credit concerns are low.

Politicians got their act together and they passed a budget last week. Traders will assume that the debt ceiling negotiations will go smoothly in February.

Interest rates remain low and the 10-year yield on US Treasuries is lower than the dividend yield on the S&P 500. Stocks are attractively valued.

Corporations are lean and mean and any uptick in demand will go straight to the bottom line. Cash flows are at record levels and companies are buying back shares at the fastest pace ever.

Seasonal strength will work in our favor. Money Managers receive performance-based compensation and they will “goose” the market. The offers will be small now that uncertainty is low and even a small buyer can push stocks higher on light volume.

Stay long and ride this wave as long as possible. Focus on stocks that are in an uptrend and have consolidated for a few weeks in a tight range. Wait for the breakout and buy calls. These moves tend to last a few days and the market will provide a tailwind.

It is always wise to have a stop in place and it is time to move it up. Use the breakout as your stop (SPY $181.50).

2013 has been a banner year and 2014 is shaping up nicely.

MERRY CHRISTMAS TO YOU AND YOUR FAMILY. MAY YOU BE BLESSED THIS HOLIDAY SEASON!
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