Our market sentiment indicator has indicated that US Energy Sector has also turned bullish, meaning all 4 major pillar sectors of economy has turned bullish! As I have mentioned in my interview with radio FM958 2 weeks back, oil prices should break out of $90 soon. Now it is at $92.70
With this push from the energy sector, we expect oil prices to continue to march higher mid term and Dow to continue to break 13650, 5 years high.
Having said that, we foresee that US market may reach a tipping point perhaps in 1.5-2 months time. Do take note of our market sentiment indicator as we depend on it to correctly tell us when.
Once any of 4 major sectors start to turn bearish, cut down on your bullish positions. You may want to hedge your positions by shorting the weak against the strong sector. Btw, the 4 major sectors are energy, technology, healthcare and finance, the pillars of US economy!
Of course we are not advising you to sell all your bullish positions and short now. In fact, we think this short term bullish run has just gathered momentum. It will reach a peak only when 1 of 4 pillar sectors turns bearish. Not now. The musical chair is still spinning. But when you see the momentum stopped with one sector bearish, that may be the start of the stop of the music.
Having said that, we are not saying that US market will enter into a 2 years bear market. NO, what we meant is it might consolidate 1000 points again, regroup and march forward again! Do remember that market never runs every month. In a year, there will be a few panics to knock the market off track first. It is this time that we should pick up stocks cheap!
Remember good investors always like market to plunge. Let us look forward to the plunge perhaps in 2-3 months time!