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Real Time Insight

Investors knew the taper was coming and yet stocks were hitting new highs up to 1709 in early August. Since then stocks have slowly dripped lower.

Perhaps it is just a classic consolidation. Perhaps it is more.

To understand what is likely to happen next we need to discuss the nature of this recent decline. Which of the following do you think best describes why stocks have been on the decline.

1) Classic 3-5% consolidation before getting ready to make new highs.

2) Stock correction of 5%+ before making new highs.

3) QE taper = higher rates = stocks less attractive = major gains over and stocks go sideways to down in the future.

4) Other.

Which do you think best describes where we are at? And then be sure to share your ratioinale as to why in the comments section below.  

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