Jay Kaeppel | Sep 18, 2017 12:28PM ET
In this article on 9/6 I laid out in pretty great length (at least by my standards) the bullish and bearish factors facing the market at the time. Since then, not a lot has changed. Other than maybe the stock market bullish trend possibly strengthening a bit:
The gist of the 9/6 article was this:
Figure 1 displays four major market averages. 3 of the 4 have broken out to even higher new all-time highs (the only one of these that has not so far is the Russell 2000 small cap index).
All four of these indexes are above their 200-day moving average and 3 of the 4 recently hit new all-time highs. This is essentially the very definition of a “bull market.” In fact, one of the worst actions an investor can take is to look at new all-time highs, pronounce “this is the top” and sell everything. It’s not that this approach can’t work out. It just seldom ever does. And it does take a certain degree of hubris as it is tantamount to “telling the market what it’s supposed to do.”
Figure 1: Courtesy AIQ TradingExpert
h3 On The Cautionary Side/h3On the flipside, Figure 2 displays my 4 market “bellwethers.” Recently, all 4 were flashing a warning signal. Late last week, however, the electronics sector (represented here by ticker SMH) broke out to a new high so can not presently be categorized as “bearish.”
Figure 2: Courtesy AIQ TradingExpert
A close eye should currently be kept on the Dow Transports and ticker XIV. If these continue higher and pierce their recent highs the stock market may well be “off to the races” again. If not, well, you get the idea.
I do suggest at least a quick re-perusal of the original article in order to note some of the potentially bearish developments that surround the market at the moment.
h3 Summary/h3
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.