Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
Stocks, Bitcoin and Crypto Markets Breaking Bad on Donald Trump Pump - 21st Nov 24
Gold Price To Re-Test $2,700 - 21st Nov 24
Stock Market Sentiment Speaks: This Is My Strong Warning To You - 21st Nov 24
Financial Crisis 2025 - This is Going to Shock People! - 21st Nov 24
Dubai Deluge - AI Tech Stocks Earnings Correction Opportunities - 18th Nov 24
Why President Trump Has NO Real Power - Deep State Military Industrial Complex - 8th Nov 24
Social Grant Increases and Serge Belamant Amid South Africa's New Political Landscape - 8th Nov 24
Is Forex Worth It? - 8th Nov 24
Nvidia Numero Uno in Count Down to President Donald Pump Election Victory - 5th Nov 24
Trump or Harris - Who Wins US Presidential Election 2024 Forecast Prediction - 5th Nov 24
Stock Market Brief in Count Down to US Election Result 2024 - 3rd Nov 24
Gold Stocks’ Winter Rally 2024 - 3rd Nov 24
Why Countdown to U.S. Recession is Underway - 3rd Nov 24
Stock Market Trend Forecast to Jan 2025 - 2nd Nov 24
President Donald PUMP Forecast to Win US Presidential Election 2024 - 1st Nov 24
At These Levels, Buying Silver Is Like Getting It At $5 In 2003 - 28th Oct 24
Nvidia Numero Uno Selling Shovels in the AI Gold Rush - 28th Oct 24
The Future of Online Casinos - 28th Oct 24
Panic in the Air As Stock Market Correction Delivers Deep Opps in AI Tech Stocks - 27th Oct 24
Stocks, Bitcoin, Crypto's Counting Down to President Donald Pump! - 27th Oct 24
UK Budget 2024 - What to do Before 30th Oct - Pensions and ISA's - 27th Oct 24
7 Days of Crypto Opportunities Starts NOW - 27th Oct 24
The Power Law in Venture Capital: How Visionary Investors Like Yuri Milner Have Shaped the Future - 27th Oct 24
This Points To Significantly Higher Silver Prices - 27th Oct 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Trading View: Is It Time To Take Profits From This Stock Market?

Stock-Markets / Stock Market 2017 Dec 20, 2017 - 02:55 PM GMT

By: Christopher_Quigley

Stock-Markets

I have been teaching investment and trading technique since 1995 and in all those years never have I sensed such anxiety in students, colleagues and readers. For the last 6 months, almost on a daily basis, I have been asked the same question: is now the time to get out of this market and go to cash?


As always with trading and investment decisions one should never become emotional and a good understanding of technical analysis helps one see the wood from the tree and remain grounded. At the outset let me make it clear that from a technical point of view there is no obvious material weakness in this market, even though is very very over-bought. As we speak there have been recent “breakouts” to new highs on the Dow Industrials, the Dow Transports, the S & P 500 and the NASDAQ 100. One major index that I like was showing some weakness, the Russell 2000 small cap, but last week once it reached its 50 Daily Moving Average (DMA) it bounced right back up in concert with all the other indices.

However, one student who has over one million Euro in a pension fund, was beginning to get very anxious. She had got in very early on this bull market and following Dow Theory she had stuck with the trend and was getting very worried about her profit pile. (Remember the large-cap US market is up over 230% since this rally commenced in March 2009). In this instance I was happy to support her decision to take 25% of her portfolio off the table and place it in cash. This “war-chest” she wants to use to take advantage of any significant correction or new recession.

Speaking of recession in my opinion one could occur at any time, given that in historical terms this bull market is “getting on in years”. What could be the catalyst for such an event one might ask? Well take your pick: a successful Trump impeachment, should control of Congress be lost to Democrats next November; a sudden Middle East crisis, prompted by Trump’s unilateral recognition of Jerusalem as Israel’s capital; unexpected interest rate rises due to unanticipated growth in inflation levels; a sudden withdrawal of the USA from the WTO (World Trade Organization) prompting a trade war with China; an unsuccessful “hard” Brexit process causing  economic and banking instability throughout Europe, particularly in Italy and Spain; a collapse in the Bitcoin digital ponzi scheme, a valueless cypher now being actively traded by over 23 million persons on Coinbase alone (only one of numerous worldwide crypto currency exchanges).

That being said, for those investors/ traders who did not fully benefit from this exceptional bull “expansion” I would still recommend being invested in equities, given current momentum. The Trump tax reform plan has the potential to radically transform the profitability of mainstream American business and I do not think the full positive reality of this timely development has been totally priced into the market, but future index action will tell thus follow the market in candlestick price mode not tips, media gossip, intuition or emotion.

Chart: Dow Industrials: Daily.


Chart: Dow Transports: Daily.



Chart: S & P 500: Daily.



Chart: NASDAQ 100: Daily.



Chart: Russell 2000: Daily.

Charts: Courtesy of StockCharts.Com

Christopher Quiqley

B.Sc., M.M.I.I. Grad., M.A.
http://www.wealthbuilder.ie

Mr. Quigley was born in 1958 in Dublin, Ireland. He holds a Bachelor Degree in Accounting and Management from Trinity College Dublin and is a graduate of the Marketing Institute of Ireland. He commenced investing in the stock market in 1989 in Belmont, California where he lived for 6 years. He has developed the Wealthbuilder investment and trading course over the last two decades as a result of research, study and experience. This system marries fundamental analysis with technical analysis and focuses on momentum, value and pension strategies.

Since 2007 Mr. Quigley has written over 80 articles which have been published on popular web   sites based in California, New York, London and Dublin.

Mr. Quigley is now lives in Dublin, Ireland and Tampa Bay, Florida.

© 2017 Copyright Christopher M. Quigley - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any trading losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors before engaging in any trading activities.

Christopher M. Quigley Archive

© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in