A silver lining to the dark clouds of economic and market gloom may manifest itself in the form of a once-in-a-lifetime buying opportunity. At least that's what Thomas Kee of Stock Traders Daily says. Kee has made a name for himself crunching macro economic data and long-term cycles, and he says we're smack dab in the middle of "the third major down period in U.S. history," which he says will last through the end of the decade and then some. "There has not been a new high in the market since the down period began back in 2007," Kee points out.
As if that weren't bad enough, Kee adds that gridlock in Washington and the approaching "fiscal cliff" could leave the economy looking a lot worse come the end of the year.
It all leads back to Kee's "bright side" argument that if you are savvy enough, the current environment presents investors with great trading opportunities. "We're also near a relative high, so this would be when you want to sell so that you can buy back again when everything looks ugly. But there's an absolute opportunity for people that are proactive and are willing to do the work."
Kee goes on to say that after you sell at these highs, consider the short side of the market, one that, he says, "looks very, very attractive to me right now until such time as we get that capitulation again, which we all know is coming."
In terms of a target, Kee says get out of your long positions around the S&P 500's current 1369 level and look for a downside target of 11oo, at which point he advises, "consider buying back again and riding that roller coaster, that trading range, back to the highs."
What do you think? Are we in for another decade of downward trends, or are brighter days ahead? Are you playing the short side of this market or sticking with you long positions? Let us know on our Facebook page.