Unfortunately or fortunately, depending on your perspective, the Stock Market will Crash. 

Remember, the real economy lags the stock market as seen above.  This is critical to understand where we are now in this monstrous yet magnificent cycle.  If we are at a top in the stock market, then it would make sense that the real economy is only halfway through it’s recovery.  That explains a lot.  

HOW MUCH FARTHER CAN THE STOCK MARKET GO?

I will do you one better.  I will call the exact TIME the market will crash.  It will crash when the unemployment rate starts going up and the smart money gets out just in time. 

So, after all the noise that unwittingly confuses the hell out of people, there is only one number that matters now, and the release times are below:

Feb 5th – ADP Non-Farm employment change

Feb 7th – Unemployment Rate

 

March 4th – ADP Non-Farm employment change

March 6th – Unemployment Rate

 

Until these numbers rise, and rise they will, we will not have a major event.  However, GDP or other geopolitical or economic developments inside the U.S. could spark large selloffs.  Which is why I will continue to ride Long Puts at entry points where RSI and Bollinger Bands are stretched.  On a related note, the Long Puts this month will likely expire worthless.  I am not the slightest bit worried about the few hundred dollars they cost as the upcoming moves in the Market I expect to more than make up.  The positions until then are mere insurance for an early start.

Stay tuned.