We have avoided what would have been normal 20% or so corrections which would have been followed by the market returning up after each down move allowing funds and institutions the opportunity to invest at reasonable prices. We are now at historical valuation levels that have ALWAYS BEEN FOLLOWED BY HARSH BEAR MARKETS. We have no change in our outlook. Off the 2014-2015 stock market high we can still see a downside move risk for the overall stock market of 25% to 30%  based upon technical and cyclical analysis. However, right from the start we want to point out that there numerous stocks that are incredibly undervalued that offer the opportunity for exceptional capital gains. For example, Gold, Silver and Commodities in our view are extremely undervalued.

  About China’s Currency Devaluation: The Renminbi (also called the Yuan) is very different today than it was a generation ago. Twenty years ago, foreigners used special exchange certificates rather than local currency and only in selected stores, hotels and restaurants. Today, foreigners can use local currency at anytime and anywhere. Moreover, some 20% of China’s merchandise trade is settled with the Renminbi.

For some of us, cycles are more important than fundamentals for forecasting the direction of the markets, particularly for long term forecasts. And when cycles have a strong similarity and are concurrent with economic and business fundamentals, the cycles are even more effective in their ability to forecast. Many cycles occur often on or near to schedule.