As I indicated in previous posts, we appear to be in the bubble phase of the market. It is hard to predict when this will all end, however, we will need to put in a topping pattern before this all comes to an end. You can see, by looking at the chart below, that we have accelerated the move to the upside. Corrections are shorter in duration with the November correction being the shortest since the rally from November of last year.

We should reach an intermediate top sometime between now and the first week in January. At that point, we should see a more substantial correction before we once again move higher. I would caution against being too greedy.  I would suggest that you reduce any leverage that you may be using as the market moves to new highs as the year comes to an end. Right now we need to stay cautious just in case things don’t play out as I am expecting.

The next move up, next year, should be substantial. I’ll keep you informed if this outlook appears to be clouded. If the market tops earlier than expected, we should have some time to adjust.

The Mexican Peso is again facing resistance at the lower 19 area. We saw a correction the last time we reached this zone, so I would suspect that it may happen again. This time the support should be a little higher, perhaps testing the 18.5 level.

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