The goal of this post is to explain the market going forward and clear up a misconception about valuations, and market growth:
Firstly,
Quick look at the graph we see, what could have been, a breakaway gap out of the pennant, however the breakout failed. Finding support back at the resistance, interesting to see how this plays out. I am bullish.
Now, lets talk about markets and clear something up about valuations and asset prices (I'm talking to you bears),
In this new paradigm we live in its crucial to understand something, that is, as interest rates approach zero and stay this low, debt becomes less risky and higher levels become more sustainable for a prolonged period of time. As a result asset prices (financial assets and real assets) are able to boast these crazy valuations because we have all this cheap money pouring it at once. In terms of real assets, which generate income for holders of financial assets (i.e shareholders), cheap money is able to fuel expansion and growth rapidly. Under these circumstances using put/call ratio, forex signals, and micro-econometrics to gauge medium-term price movements becomes obsolete and pretty much useless. I have no intention to bash all those who posted their short ideas on the S&P, NASDAQ, or DOW, but to those who are reading this, it's important to understand that in this cheap money paradigm all of those indicators will not function as they did 10 years ago. We are now in a cheap-money paradigm that has no plans to hit the brakes.
This being said, I would highly recommend having a bullish outlook on the market and taking small profits along the way, stop trying to fight the market and find reasons for it to crash as you will continuously find yourself on the short-end of the stick (no pun intended).
Note: I am expecting a small correction sometime soon, but I doubt it come to fruition
Firstly,
Quick look at the graph we see, what could have been, a breakaway gap out of the pennant, however the breakout failed. Finding support back at the resistance, interesting to see how this plays out. I am bullish.
Now, lets talk about markets and clear something up about valuations and asset prices (I'm talking to you bears),
In this new paradigm we live in its crucial to understand something, that is, as interest rates approach zero and stay this low, debt becomes less risky and higher levels become more sustainable for a prolonged period of time. As a result asset prices (financial assets and real assets) are able to boast these crazy valuations because we have all this cheap money pouring it at once. In terms of real assets, which generate income for holders of financial assets (i.e shareholders), cheap money is able to fuel expansion and growth rapidly. Under these circumstances using put/call ratio, forex signals, and micro-econometrics to gauge medium-term price movements becomes obsolete and pretty much useless. I have no intention to bash all those who posted their short ideas on the S&P, NASDAQ, or DOW, but to those who are reading this, it's important to understand that in this cheap money paradigm all of those indicators will not function as they did 10 years ago. We are now in a cheap-money paradigm that has no plans to hit the brakes.
This being said, I would highly recommend having a bullish outlook on the market and taking small profits along the way, stop trying to fight the market and find reasons for it to crash as you will continuously find yourself on the short-end of the stick (no pun intended).
Note: I am expecting a small correction sometime soon, but I doubt it come to fruition
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.