I’m not the only bear out there. This is your market. Yes, there are major issues as shown, but what if this guy is right?
There’s no way I agree with Tim Knight’s view, but it almost seems that way, doesn’t it? Remember, Tim is a huge bear as well.
Moving right along… we will NOT get a “sell, sell, sell” warning from Wall Street. Hell, we’ve been getting them for over a year from some of the biggest money managers out there- nothing so far.
Your charts are your only friend. Why? Because that’s real money moving in and out and you are paid on being right as to the direction (trend) of price movement. Yes, there are less and less stocks participating; yes, as the article points out, there are less leading sectors participating; yes, the smaller stocks (IWM) are lagging big time.
Still, if you’re paid to trade with the trend, even though, participation is waning, you have to trade with trend… albeit, as I suggest, smaller size while maintaining a known reversal trade ready to execute.
You are playing in a risk game. You are trying to understand economics (not exactly a precise science, in fact certainly not a science) in 2017 which in no way looks like economics prior to 2007. The fact is there are waaaaaaay too many variables to ponder and so we read what we can, understanding what we can, appreciating what we see divided by the number of articles read for the week, and place our bet. (I do hate using that word, but what else can it be called? Even a hedged bet has potential for loss.)
Now, why would I talk like that, stressing the risk? Because, unlike neophytes in this market, my first question is NOT how much can I make on this trade, BUT how much can I lose on this trade? I have a very clear understanding of working capital and preservation of same… without it, I’m out of the game altogether. I’m VERY willing to risk it, but on my terms.
You see the indices trying for new highs. That’s nice. There’s only one thing wrong:
Any and all markets, whether the indices, metals, and bonds are tradable over any time period. Do you know what you’re doing considering your time view?
Stalk your trade. Plan your trade. Execute your plan.