Upside in the stock market is limited

The stock market has entered a new phase, one which can be described as sideways. I have talked about this pattern many times, when the upside is limited and the stock market makes new highs, there will be an increasing number of sellers. This means the rally will fail to extend and profit taking will follow.

This creates a sideways pattern like this:

Elliott wave analysis suggest the stock market will trace out a similar pattern probably until 2020. This will be followed by a long term downtrend. A buy and hold strategy will fail, however, if you follow my analysis you will be be able to capitalise on short term moves.

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