INDU or DOW Update...
One thing you have to remember about trading is that the markets NEVER and I mean NEVER give you what you expect. Since 2008 with the crash that devastated portfolio's for the third time in less than two decades mom and pop had enough. They piled into Bonds and Treasuries for the most part too afraid to risk anything on the markets again. In one sense who could blame them. I mean when they plop their money down it is when money managers make their exits. Like Warren Buffet and people like this. They can't get out if mom and pop don't get in. They simply can't make their profits without an exit in liquidity right. So sure the frothy top blew off. When mom and pop couldn't take the pain any more they sold and of course that is when the Buffets of the world were buying.
This time around you had the back drop of the Fed with QE all the way through to blow the bubble up again. Mom and pop generally didn't take the bait this time. They sat back and watched for a long time as the market moved higher and higher on low volume. They simply didn't trust Wall Street any more, if they ever did.
That being said leverage is as high as ever these days and the markets are making new highs. I think with Trump being elected and the people that elected him being certain of change (which to be honest they will get likely the opposite of what they expect) we find exuberance starting to return to the economy and some reckless abandon that so populated the roaring 80's and 90's when there was a little more reason to be this way.
I still see extremes in the smart money (commercials) and they may let the bubble go a little higher but I think that the conditions may be right for them to sucker a few more idiots into the market. Maybe the 21000 area but 20000 is a nice round number too so it begs the question once again, "will they hammer mom and pop yet again" and if they do "will the Fed have enough ammo to stop a full blown crash"?
You see no one sees a black swan coming. For years pundits have been screaming of the disconnect between the economy and stocks. However it did not defer the steady rise. For the simple reason that everyone expected it to happen. Now I am not so sure people feel that way any more. They have all but thrown in the towel on the DOW being allowed to fall and they have all but conceeded that the DOW will hit 20000 and head much higher.
Hmmmm....maybe so but in my book, not much higher.
The conditions are ripe again for the larger players to make money. I have to admire them they have been patient. They have done their work to lead the cattle back to the barn. My only question is not if but when they choose to pull the rug out. It isn't so much sentiment as it is complacency that rules the markets. How many times have we seen a sure thing fall to pieces. Brexit, The Swiss Event, Trump himself. These were all black swan events my friends. They are not supposed to happen with any sort of frequency however three in the last two years is a lot. Sorry my friends I am not following the crowd on this one. I am sure I will have to be patient but at the same time I suspect I will be rewarded with at least a major correction. The market is ripe for it as I have heard nothing from anyone about any sort of crash. That my friends is the time.
This time around you had the back drop of the Fed with QE all the way through to blow the bubble up again. Mom and pop generally didn't take the bait this time. They sat back and watched for a long time as the market moved higher and higher on low volume. They simply didn't trust Wall Street any more, if they ever did.
That being said leverage is as high as ever these days and the markets are making new highs. I think with Trump being elected and the people that elected him being certain of change (which to be honest they will get likely the opposite of what they expect) we find exuberance starting to return to the economy and some reckless abandon that so populated the roaring 80's and 90's when there was a little more reason to be this way.
I still see extremes in the smart money (commercials) and they may let the bubble go a little higher but I think that the conditions may be right for them to sucker a few more idiots into the market. Maybe the 21000 area but 20000 is a nice round number too so it begs the question once again, "will they hammer mom and pop yet again" and if they do "will the Fed have enough ammo to stop a full blown crash"?
You see no one sees a black swan coming. For years pundits have been screaming of the disconnect between the economy and stocks. However it did not defer the steady rise. For the simple reason that everyone expected it to happen. Now I am not so sure people feel that way any more. They have all but thrown in the towel on the DOW being allowed to fall and they have all but conceeded that the DOW will hit 20000 and head much higher.
Hmmmm....maybe so but in my book, not much higher.
The conditions are ripe again for the larger players to make money. I have to admire them they have been patient. They have done their work to lead the cattle back to the barn. My only question is not if but when they choose to pull the rug out. It isn't so much sentiment as it is complacency that rules the markets. How many times have we seen a sure thing fall to pieces. Brexit, The Swiss Event, Trump himself. These were all black swan events my friends. They are not supposed to happen with any sort of frequency however three in the last two years is a lot. Sorry my friends I am not following the crowd on this one. I am sure I will have to be patient but at the same time I suspect I will be rewarded with at least a major correction. The market is ripe for it as I have heard nothing from anyone about any sort of crash. That my friends is the time.
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