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Thursday, January 11, 2018

Daily update 1/11 Understanding Secular Stock Market Cycles

Panic buying continues.

All the major indexes closed at new highs.  Small caps were particularly strong.  Breadth was +72%.  That is rather strong for this stage of a rally.  Another day or two and we could be looking at a short term buying climax.  New highs were 286.  That is very near recent strong days.  New lows remain elevated at 34.

The futures bounced off the upper channel line and continued up.  Still in accelerated up move mode.

The green count turned back up, but is still below the recent peak.

The optimism is so thick you can cut it with a knife.  Today reminded me of Buffet's quote:
“Be Fearful When Others Are Greedy and Greedy When Others Are Fearful”.  People are clearly getting to the greedy stage.  How can we know when we have reached peak greediness?  At the rate we are going we could be up 20% in the fist half of the year.   I saw a headline on CNBC the other day that the market was off to the best start to the year since 1987.  I wondered whether that should make me feel good or bad.  The first half of 87 was really good.  The back half not so much.  For now I guess we just enjoy the ride and worry about it later. 

This is from a couple of years ago, but very interesting.  Understanding Secular Stock Market Cycles


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