This is a big question going around some of my circles these days.
I’ve heard valid arguments from both sides. The bulls are convinced that
any dip, or even pause, is an opportunity to just buy US Stocks. And
the bears are convinced (and have been) that the rally can’t keep going
like this without correcting first. The last few weeks of trading have
caused both of these camps to question their conviction. At least that’s
how it appears from where I’m sitting.
As you guys know, I try not to be a bull or a bear, but just take
what the market gives us and look for good risk/reward opportunities
that way. Most of the time, my positions have nothing to do with the
direction of the S&P500. But it’s important to have an idea of which
way we’re headed, especially if the resolution out of this might be to
the downside. You see, during violent sell-offs, it doesn’t matter how
“good” your stock is, or how much cash it has on the books, or how many
times momentum has confirmed new highs. When assets are being liquidated
and your stock, or commodity becomes a “source of funds”, they will
sell your stock harder than you could ever imagine. This happens much
less often on the way up.
So? Is this a consolidation in the S&P500 before a new leg higher? Or was that it? Was that the bull market? (more)
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