'Get Back In There And Sell, Sell, Sell'

For those of you who remember the movie Trading Places, this was a famous scene that I always remember when we see emotional reactions in the market after a downdraft.

And, when I went to read articles being published over the weekend, it seems they were all pretty much in agreement with the sentiment expressed in this scene: “You idiot. Get back in there and sell, sell, sell.”

Markets go up. Markets go down. When the market is going up, people are telling you to “buy, buy, buy.” When markets are going down, people are telling you to “sell, sell, sell.” Sigh.

But, let me see if I get this straight. The fear of a trading war is what will supposedly finally “cause” a bear market based upon everything I am reading. I find that truly amazing. So, a trade war is going to cause something that all these events did not (many of which were supposed to be much more negatively impactful for our financial markets):

Brexit – NOPE

Frexit – NOPE

Grexit - NOPE

Italian referendum - NOPE

Rise in interest rates - NOPE

Cessation of QE - NOPE

Terrorist attacks - NOPE

Crimea – NOPE

Trump – NOPE

Market not trading on fundamentals – NOPE

Low volatility – NOPE

Record high margin debt – NOPE

Hindenburg omens - NOPE

Syrian missile attack - NOPE

North Korea – NOPE

Record hurricane damage in Houston, Florida, and Puerto Rico - NOPE

Spanish referendum – NOPE

Las Vegas attack - NOPE

New York terrorist attack – NOPE (market even rallied strongly)

Oh, I almost forgot. I thought rising rates were going to cause this market to come down? But, what did rates do when the market was dropping this past week? It sure looks to me like rates were dropping while the market was dropping too!?

So, as I hear about wars, tariffs, gathering storms, and death crosses, many are building up the fear needed to kick off the next major rally in the market. As for me, all I want to know is how the market is moving through the levels we are watching. You see, I can ignore all the noise to which most of you pay attention, as the numbers tell me the entire story I need to know.

When I was looking up over 2600SPX when all we heard about were “gathering storms” and an imminent “market crash” in early 2016, it was quite prudent to ignore the screaming of the masses. And, I think that it is equally prudent to do so at this time as well.

For me, this market is rather simple. As long as we hold over the 2400-2440SPX support region, I will be looking for a set up in the market pointing to 3000+. It would take a sustained break of 2400SPX to have me concerned something a bit more bearish is playing out sooner than I had expected. But, even so, it would not lead to a major bear market, but a 20-30% correction, which will set up the next major rally over 3000. But, I still think the greater probabilities suggest that this type of 20-30% correction will not begin until 2019. And, I will maintain that expectation as long as we hold over 2400-2440SPX support.

See chart illustrating the long-term wave counts on the S&P 500