Fed Will Shock Markets; Expect Monstrous rally in 2016

Fed Will Shock Markets; Expect Monstrous rally in 2016

[color-box color=”green”]Central bankers are too smart to allow such a foolish thing to occur; they purposely orchestrate a few moves that appear stupid in nature to give the hard money fools some respite so that they can feel vindicated after all these decades of being slammed into the concrete head first.  Then suddenly they come out with a left hook from nowhere that stuns the masses and viola, mission impossible becomes mission possible.   They have no problem in milking the Cow to death or killing the Golden Goose, because when it comes to the masses, there are many cows to milk and many Geese to lay eggs.  Hence, what does a few dozen, hundreds of even thousand cows matter? [/color-box]

Must Read: Top Gold stocks to invest in 2016

Do we agree with this stance? That is irrelevant as we have long indicated. Whether we agree or disagree with what’s going is irrelevant;  what is going to happen next that takes precedence.  The trend quite clearly illustrates that misery loves company, and until misery hates company the masses will always lose.  The Fed’s are masters of mass psychology, and mass psychology trumps all other analysis, for it reveals up to what limit you can push the masses.  Emotions are the main driving force for 99% of the populace; hence, if you understand mass psychology, you understand the main driving force behind the mass mindset. This is why the Fed can and will push the envelope to the outer limits.

The number of bears has increased to 41%, and the neutrals have dropped to 31%; individuals from the neutral camp have jumped into the bearish camp. The combined score is 72%, which indicates that emotions will soon hit the hysteria levelThe illusory economic data still looks great and markets do not crash when the perception is that the economy is improving and market sentiment is bearish.  More downside testing is likely, but a crash is still not in the works. Market Update Jan 31, 2016

The Dow came within striking distance of testing its Aug lows, but fell short, and as such we still don’t think it’s out of the woods.  A move to or below the Aug 2015 lows would not come as a surprise to us. Note that many stocks are diverging positively from the markets and slowly trending upwards, while the market continues to correct.

The August correction ended almost as fast as it began so one cannot fully quantify that as a deep cleansing correction.  Why do we mention this? Well if this correction maintains its current trajectory it could end up knocking a huge bunch of speculators out of the market.  When this happens, a market gains a new lease on life.  Thus, there is a good chance that the current correction could resemble the dot.com correction of 1998; It looked liked the end was near, but it proved to be just the beginning of a massive bull market that culminated with the Nasdaq ending 1999 with a gain of 100%.  Unless the trend changes our targets, 18,800-19,000 for the Dow still hold. Market Update Jan 31, 2016

Speculative forces have almost been eliminated from the markets, so the bedrock is being nicely set up for a monstrous rally.  Watch the bears scream bloody murder when they see all their profits vaporise and then take on massive losses.  Bears are notorious for overstaying their welcome, and they are not going to change their tactics because they assume that this is the mother of all corrections. Remember never fall for the crap that a half glass of water can be viewed as half full or half empty.  This concept was invented to convince fools that the fools who came up with this concept are wise when in fact they are not. When you see a glass of water, the only thoughts that should enter your mind are one of the following:

Must Read: Religious wars set to Rip Europe Apart

Am I thirsty? If you are, you drink it.  If you are not thirsty, you move on and focus on more pressing matters.  On the same token, the concept of a market crash is retarded.  The real premise is, do you want to invest in the market? If the answer is yes, then you need to focus on your criteria, and that is all that matters.

Other related articles

How to Profit from Misery & Stupidity (March 4)

Religious wars set to Rip Europe Apart  (March 4)

Oil prices: bottomed out or oil prices heading lower (Feb 28)

China targets corruption: strikes zombie companies hard (Feb 27)

Mob Mentality: Understand, Overcome and Win Stock-Market Game (Feb 26)

India vs. China; Which Market is better  (Feb 24)