Wednesday, October 2, 2013

Obama Says That Wall St. Should Be Worried!! Should You Be?

After a long time, we have witnessed something amazing today: President of the world's only super power saying that Wall Street and investors should be worried about the prospects of the economy because politicians in the congress cannot get their act together.

First, this kind of statement coming from a president does not make sense. Secondly, will it really impact the financial markets??

The answer for the time being is NO!! Markets like to fool the majority, as we have said multiple time on this blog. Political uncertainty is the perfect tool to make people distrust the economy for the time being. As this distrust increases, market will start climbing the Wall of Worry built on the foundation of political discord.

Overall, market remains in an uptrend. Following chart shows a clearly impulsive rise from August 30 bottom (IPM Model Bottom Date) to Sept 18 Top  (IPM Model minor turn date). Since topping on Sept 18, market has declined in a choppy formation and has corrected 50% of the rise. This suggests that the market might have just completed a correction phase, and it is ready for another leg higher.

As long as 1675 is held, benefit of the doubt will go to the Bulls and we should expect further upside. Going long makes even more sense right now because this is the most difficult trade in the face government shutdown and political bickering in D.C.

Note: Next IPM Model turn date has been emailed to subscribers. IPM Model turn date can be used to time market entry and exit points.

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