This post has NOTHING to do with sex- but has everything to do with being provocative. Since my last post the stock market has turned the corner from enthusiasm to gloom!- Now it’s odd as we just broke through the 20,000 with the DOW last week, an obvious milestone. As mentioned in my last post this has little to do with data points and information- but the thought and hope of future improving data. Typically the market shows overwhelming euphoria sans pessimism and the crash comes suddenly, and this time that’s not the case. But the headlines are prominent:
What should be causing us to all click our collective heels is actually bringing uncertainty and fear, brought to you by the Main Stream Media.
Trend followers love break outs to new highs- some of the prominent ones have literally made millions of dollars buying new highs as that signals strength. Yet this time the media is portraying gloom and doom. I’d like to point out that i believe that No ONE knows where the market will go, at least not one single person. yet I believe in prognosticative patterns that may more often than not signal direction ie System Trading. Read the bio of Renaissance Technologies CEO Bob Mercer, who developed a pattern in the market which has generated BILLIONS in profit!!
The FED has ultimate control of the money supply and fiscal policy, and the easy money policy made it easy for Corporations to bid up the price of their own stocks with cheap money over the last 10 years. As the FED will attempt to tighten the money supply under Trump- under the guise of normalizing rates, the emphasis of the trading community will shift toward growth of the economy. The direction those criteria will take us No One knows- but it’s not the data that will move the market, it’s the interpretation of the data and the emotions that the data brings forth that ultimately will move the market!
Sadly the media can portray good times badly and can sell an economic depression as prosperity. Again let the data be the judge- as of right now the DOW is in consolidation mode- after an up trend- technical analysis dictates that the direction into the consolidation phase is usually the direction OUT of the consolidation- so until we get more data to change the view that’s where it stands. Minor intra- week low is 19667- minor closing low is 19732. Who was under the impression that once we breached 20K to the upside we’d stay their permanently or indefinitely? Trade the market use the data available and Good Luck!