Yes, as you presciently pointed out, I believe a correction will also occur quickly. Although I monitor the markets daily throughout the day, I do not trade them that way. I use weekly charts to make my strategic decisions, and what I've found is most large daily price action tends to get at least muted by following trading days so that the weekly bars are actually less volatile than the dailies. I believe a correction is due, however I don't believe the bear is ready to come out of hibernation just yet. I will post on here immediately if my thinking changes. thanks for the comment! Tony
I would be interested to hear more of your viewpoint, I am always looking for more information and market intelligence. I went to your website, but didn't find a recent article. I've studied some EW theory in the past, however I found it difficult to quantify, code, and backtest, something that is critical to me if I am going to use it to manage money. Thanks for any info! Tony
Thank you for the kind words. Although, I feel like we are vulnerable to a correction really at any time, as during all bull markets, that the awakening of the bear is unlikely at the current time. With the metrics mentioned above, and Fed liquidity, client interviews, I feel the weight of the evidence is in support of more upside. However, that being said, I avoid trying to predict what will happen or what the market will do, I learned long ago that I'm really not very good at it. What I can do though, is watch for warning signs, and react to them when the weight of the evidence tips the opposite direction. Thanks again!
When buying at these levels scaling in, especially on weakness is critical. What began yesterday is either the beginning of a correction or even possibly the awakening of a bear. Impossible for me to tell at this point, however I will be monitoring fund flows, and if it appears that the biggest players have abandoned ship we will follow soon after. I don't try to predict what the big players do, all I can do is follow them. By definition it implies lag, however it still provides an edge over being left holding the bag.
Yes, I've thought of this too, it made me think of market expectations. I have seen stocks that make a ton of money, but the market expected even more, sell off. I have seen stocks that are money pits, rally because they didn't lose as much money as they were expected to. This expectation (something I am trying to quantify) is key to positioning correctly in the market. For now, it appears that the market is rewarding almost everything remotely positive. It is something that can and will change, but for now it appears to be in effect.
You are absolutely right, it appears the Fed is buying up all the "toxic" assets on the bank's balance sheets, and I'm sure they are lucky to get pennies on the dollar in actual value. However, that is the mechanism which they have chosen to strengthen the banks, allowing them to lend again, and restart the economy. I don't necessarily agree that it's right, or that the banks should be rewarded for careless behavior, but it is the reality and the cards that we are dealt. Like good poker players we need to somehow figure out a way to beat the house with the cards stacked against us, and get up from the table with more than we sat down with.
Thank you for all of your comments and input, I value all input, especially that which is counter to my own analysis. I am constant looking to improve, refine, and adapt my analysis of all of the market information I gather. I feel the gist of the article comes down to the fact that if you are long the market in an asset allocation that is appropriate for your age and risk tolerance, that the weight of the evidence supports remaining in the market at this time. Thank you, Tony Roylance
Is The S&P 500 Overbought? [View article]
thanks for the comment!
Tony
Is The S&P 500 Overbought? [View article]
Thanks for any info!
Tony
Is The S&P 500 Overbought? [View article]
Is The S&P 500 Overbought? [View article]
Is The S&P 500 Overbought? [View article]
Is The S&P 500 Overbought? [View article]
Is The S&P 500 Overbought? [View article]
I feel the gist of the article comes down to the fact that if you are long the market in an asset allocation that is appropriate for your age and risk tolerance, that the weight of the evidence supports remaining in the market at this time.
Thank you,
Tony Roylance