THE RAMIFICATIONS OF “EARLY”
The move made on Friday was on the earliest side of the scale when it comes to breaking out of the range and embarking on the second leg of this renewed bull market. There are very few moves the markets make that don't have some level of significance attached to them, especially when you look at the timetable the market is working with.
The fact that the market decided to make its move up so quickly is a sign of strength. Powerful 4th quarter rallies, such as the rally of 1998, don't pause to catch their breath for more than 5-7 days at a time. I mentioned on October 12th that I was expecting a 5-7 day pause. This week, I came to the conclusion that the pause would last into next week possibly. I was wrong in changing my original assessment. I underestimated the markets strength.
The realization that the market is working on an accelerated schedule is what made me add exposure late Friday. Just as I piled into the market during the last hour of trading on October 4th in anticipation of the first leg up from the bottom. I am now adding exposure in anticipation of the second leg up off of a significant market bottom.
This second leg will be much more steady. It will be frustrating for those who choose to ignore it and doubt it, as it should be a steady move up with very little in the way of choppiness going forward.
With that said, my plan as of this moment is to hold onto a 120% invested position well into November. I may increase going forward, depending on opportunities and circumstances.
The ramifications of "early" are important to note. This market is way early. It is a sign of an abundance of strength and significant upside remaining.
