By overcoming a flurry of negative news stories since the beginning of April 2018, the market is sending a message to investors that it clearly wants to move higher over the near term.  The recent negative news stories that caused significant declines which the market has overcome:

  • April 3, 2018, China announced the enacting tariffs on 106 US product categories.
  • April 5, 2018, President Trump announced that he was increasing China’s tariffs by $100 billion.
  • April 9, 2018, FBI raided house of President Trump’s attorney.
  • April 11, 2018, President Trump informed Russia that US was readying to fire missiles into Syria.

There are two things that are driving the market higher for the near term:

  • First quarter 2018, earnings announcements by US corporations which will commence during the week beginning April 16 are anticipated to be good.
  • After reaching one year low on March 24, 2018, the Dollar/Yen ($Yen) exchange rate reached its highest level since February 2018. Assuming that the US Dollar remains stable or continues in a steady climb versus the yen the S&P 500 will likely remain in an uptrend.   View video below to learn why the dollar/yen exchange rate is a leading indicator for the S&P 500.

Assuming that the US dollar maintains its strength versus the Japanese yen the market could make an attempt to challenge its January 2018 all-time high by late Spring or early Summer.  However, this potentially happening does not change my prognosis for a minimum market decline of 50% from the January 2018 high in the next 12 months.

Based on the key economic and geo political events including a trade war between the US and China which has erupted since the major US indices hit their all-time highs in late January, I have been predicting that the probability has increased that the all-time highs for the 2009 to 2018 secular bull have been made.  In my February 2018, article “BULL DEAD, BEAR DOB 01/31/18: Expect Stock Market Decline of at Least 50%” my prediction was that the 2009-2018 secular bull died and that the new secular bear was born in January 2018.  To gain an understanding about secular bull and bear markets watch the video below:

For those who want to remain in the markets until the significant correction begins or who wish to profit from trading the S&P 500’s triple leveraged short (SPXS) and long (SPXL) ETFs a subscription to the Bull & Bear Tracker is recommended.  The Bull & Bear Tracker has a proprietary algorithm which tracks the market.   For information about the $Yen (Dollar/Yen) which powers the Bull & Bear Tracker to trade the S&P 500 go to https://bullsnbears.com/yen-sp-500/.  To subscribe go to www.bullbeartracker.com.