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In The Stock Market, What Goes Up…

…must come down. That’s how the “old” saying goes, but is that going to be the case with the stock market? The question is when is it going to start moving downward again? The last month has been great for some hefty gains and it’s actually been able to stay at these levels for over a week now.
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Two weeks ago I said that it was time to start scaling out of some of my positions to lock in the gains that I’ve made. During a three week run in the stock market, I gained over 22% in my portfolio and was quite happy. During the last two weeks, I did just that. Unfortunately, I didn’t read the trend that was going on and missed out on what could have been another 12%+ in my portfolio.
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Days like these will happen and as an investor, I’ve learned not to get myself “bent out of shape”. Instead I look at the positive side, which is the fact that I made a good chunk of change. I still own some position in the stocks, just not as many as I did two weeks ago.
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The truth of the matter is that the market will back off. But to what level. Can the DOW pull back down below 7000? Is all this growth in the past month in the stock market temporary? Is the worst to come, already past us? It seems that no matter what form of media you get your news from, they talk about how the stock market recovers six months before the economy does with unemployment shortly behind it.
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If that’s the case then, it’s time to wait for any sort of a pull back and start accumulating shares. I’m still thinking that the worst is not over. The DOW at 7000? Yes, I do expect to see that again real soon (I just expected it sooner). At where the DOW sits now, it means that there should be a 12.5% correction in the market. Like I said, I do see it it coming, but it may take as long as three months to get back there.
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Or will it?

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