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Why Stocks Could Still Soar From HereBy
Tuesday, October 13, 2015
In September, my True Wealth Systems computers did something rare... They flashed "sell" signals on nearly every system-based investment we track.
What did I do? I listened!
We sold the majority of our open positions in True Wealth Systems. And it might surprise you to hear me say this with nearly everything in "sell" mode, but I don't think the great bull market is over yet.
There are too many big-picture reasons to believe stocks could still go much higher from here. In fact, we've been through this all before, back in 2011.
Let me explain...
The more I dig, and the more numbers I dissect, the more it seems that we could be in the middle of a small to intermediate correction – on the way to much higher stock prices.
Today we're seeing the same pattern we saw during the 2011 correction.
Take a look at the chart below. It shows the S&P 500 during 2011...
 Stocks crashed in late July and early August. They then entered a volatile period for the next two months. They tested August's bottom before finally making a new low in early October. Then the game was on. Stocks began a new uptrend and didn't look back for four years...
 Buying just about anything during this period would have led to hefty profits. Now, take a look at this chart of the S&P 500 in 2015...
 The similarities between today and 2011 are striking. The S&P 500 crashed in late August. It has tested those lows after bouncing violently since then.
If this is "2011 all over again," we'll likely see more volatility and a new low in stocks before a new uptrend kicks in.
Of course, we can't know if this is how things will play out. But history is our guide here – and it says higher prices are entirely possible.
Again, I'm happy to follow my stop losses and sell when I need to. But I believe the opportunity in stocks is for higher – not lower – prices from here.
Good investing,
Steve
Further Reading:
Read more of Steve's bullish essays right here:
"A perfect setup doesn't guarantee that it will work out, of course. But I've learned that my odds are best when all of these things come together."
"This is yet another sign that higher stock prices are ahead."
"I believe we still have YEARS of house price appreciation ahead of us."
Market Notes'BASICS' GIANT ALTRIA MARCHES HIGHER Today's chart shows our "basics" approach is working: Cigarette powerhouse Altria (MO) just struck a fresh 52-week high.
As we've written many times over the years, we're fans of owning "boring," simple businesses that sell things like soda, packaged foods, booze, power tools, and other consumer basics. These companies aren't producing the next hot technologies... but they enjoy steady demand and generate huge returns for investors.
For the latest example of this theme at work, we turn to one of the giants of the tobacco industry. Altria sells the No. 1 cigarette brand in the world – Marlboro – among others, such as Virginia Slims and Parliament, and smokeless tobacco products. It's a winning business with a long history of treating shareholders well.
As you can see from the chart below, shares are in a steady uptrend. The stock is up 75% over the past three years... and just hit a new 52-week high. Altria will keep selling millions of cigarettes every year for many years to come. It's not exciting... but it works.
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