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(1/21/17)
The S&P, adjusted in "Real Dollars", continues to
trade near the top of its longer term upward channel. This has been going
on for the last two years. As I have pointed out before it's been rare to
see the S&P near the top of its longer term upward channel (points
A).
Furthermore each time the S&P has reached the top of its
longer term upward channel it has eventually gone through a substantial
correction. In three of the cases it dropped back below its long term mean
as defined by the green line (points B) and in the other two cases it dropped
all the way back to the bottom of the upward channel (points C).
This is why I still remain very cautious about the market in the years
ahead.
Amateur Investors
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