Panic Time? No. Expect FIVE Corrections in the Melt Up

You are not going to like what I'm going to ask you to do today...

My friend, you need to be prepared to experience five separate corrections in the final 12 months of the Melt Up.

Let me explain why...

Our inbox is full of panicked e-mails...

Stocks had a terrible couple of days last week. And investors are scared.

Specifically, in a little more than a week (from October 3 to October 11), the major stock indexes fell nearly 7%. The tech-heavy Nasdaq Composite Index fell even more – nearly 9%.

I get it. Moves like this don't happen all the time.

Or do they?

Actually, they do – even in the final 12 months of a stock market "Melt Up."

You don't need to look any further than the last great Melt Up in stocks to see exactly what I mean...

A fall of 10% or more is the official definition of a stock market correction. And in the last 12 months of the dot-com boom, the Nasdaq fell by roughly 10% or more – five separate times.

The chart below shows what I'm talking about. Longtime readers may remember it from an essay I shared back in February...

As you can see, these falls happened quickly – just like we saw last week.

They all happened in a month or less. But they were still painful – even deeper declines than the move we saw last week.

As I mentioned, some of you have heard this from me before. I'm sharing it again because it bears repeating today: Once investors get used to a one-way market, they forget that stocks go down as well as up.

If you were invested back in the late 1990s, all five of these moves would have made you question whether staying long stocks was the right choice.

But today, nobody remembers any of it.

The way most folks talk about the dot-com boom now, you'd think stocks did nothing but soar the entire time...

The Nasdaq more than doubled during the final 12 months of that boom. That's the part everyone remembers.

So I don't want you to get scared out of the market today... and miss out on potentially life-changing gains.

The reality is, corrections are normal. And if today's Melt Up plays out anything like last time, we could see as many as five corrections worse than what we just went through before the good times are over.

So yes, it has been a terrible couple of days... And no, you don't have to like it.

But a pullback in stocks does not signal the end of the Melt Up. I strongly believe the biggest gains are still to come.

Good investing,

Steve

P.S. If you'd like to learn more, I hope you'll join me for our special broadcast event on Wednesday, October 24. Not only will I cover all these concerns in detail, but I'll also share a major prediction on-air for the first time. You'll even get one of my favorite Melt Up recommendations, which could soar 1,000% in the months ahead, absolutely free – just for tuning in... Click here to save your seat.

Further Reading

Regular readers know Steve and his team have been tracking several "early warning indicators" as signs of the market's overall health. Read more about the simple indicator that has predicted every recession of the past 50 years right here.

In the Weekend Edition of DailyWealth, Justin Brill shared more of Steve's take on the market's recent action. Get the details here: The No. 1 Question on Everyone's Mind Right Now.

Market Notes
A DETHRONED RETAIL KING HEADS TO BANKRUPTCY

Today, we look at one of the hardest-hit victims of the e-commerce revolution…

Regular DailyWealth readers know today’s retail landscape has changed, thanks to online marketplaces like Amazon (AMZN). Many traditional retailers are bouncing back. But others are trapped in a nightmare of sinking sales and declining foot traffic. Today’s company is the latest to go belly-up…

Sears Holdings (SHLD) was once the largest retailer in the U.S. But a heavy debt load and stiff competition forced SHLD into troubled times. Since 2011, Sears has racked up more than $11 billion in cumulative losses. It seems like the end of this retailer is in sight… Yesterday, Sears Holdings filed for Chapter 11 bankruptcy protection. In the filing, the company announced that it was closing 142 more of its Sears and Kmart stores and would begin to liquidate their inventories.

As you can see in the chart below, shares of SHLD have plummeted. The stock has fallen roughly 90% over the past year alone. Retail isn’t dead, but a thrilling comeback doesn’t seem likely for this member of the “old guard”…

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