The US stock market continues to grind higher but is doing so with eroding market internals. As the market indexes rise we see fewer stocks moving up to support the move. It's a matter of time before a large correction occurs.

It seems everyone is calling for a market top, and many have done so for the past 3 years. But the key to success is to follow the market, not predict market tops or bottoms. We follow price trends and trade alongside. We do have a bearish tone looking forward the next 1-2 years for stocks, but we are not calling a market top, nor are we shorting the market in anticipation. Instead, we actively trade the markets smaller trends which occur on a regular basis (weekly and monthly) through active buying, and shorting these smaller trends.

The month of July has been an incredible month for the new and improved automated trading system as you saw from the Results posted recently. The frustrating part is that it takes some time for us to move and integrate this improved system into our platform for our users. While the system is trading incredibly well during one of the toughest market conditions we have experienced in years, we are excited that our users will have these trades executed in their accounts starting September 1st.

Adding to this excitement is the fact that stocks typically fall 3-7 times faster than they rise, which means we can make more money, and make it faster during a falling market then we do from a rising market. Once the major trend turns down (likely later this year) we will be off to the races with out-sized trading gains once again.

Over the next couple months we should start to see the US equities market top, and start its first major correction. Once it start we trade the market in a way that should generate gains as the stock market falls in value.

  S&P 500 Monthly Chart – 7 Year Cycle

The SP500 index (US Stock Market) continues to be in and Uptrend.