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So do you want the good news or the bad news first?

How about the good news?

The good news is that based on our technical analysis we believe we are most likely headed toward all-time highs in the U.S. stock market, maybe even as soon as the end of this year, maybe earlier. We believe this run will probably be the final, climatic end of this nine-year-old bull market, marked with a euphoric, blow off top that could send the major indexes soaring one last time to heights most pundits haven’t contemplated. We can’t wait.

We believe we are most likely headed toward all-time highs in the U.S. stock market

Now for the bad news.

Our indicators point to the increasing likelihood that things could get dicey before we begin our final run higher.

How dicey we can’t be for sure, so we are planning for the worst while hoping for the best. The “yikes!” case scenario could be an undercut of the February 9th low, which would resurrect fear and panic that no one in the stock market handles too well. The best case would be just a little more downside from where we sit at the beginning of the second half of the year. But either way we know through experience that it’s not going to be any fun, as just before a final blow off top Wall Street tries it’s best to chop and shake the weak hands out of their money and the market just before exploding higher. Bottom line, this is the season that can be really aggravating, frustrating, and possibly- expensive.

So for those of our readers who are passive, long term buy and hold investors, be aware that over the next few weeks- possibly months- you will probably feel some pain before you finally see some gain. And for the rest of us who are active investors, we would suggest lightening up your exposure and tightly managing your risk, so you will have lots of cash ready to put to work when we begin what should be a spectacular fireworks show finale to this aging bull.

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