We are reaching the top. No, really, we are reaching the top. Seriously, I mean it this time, this has to be the top.
I think I have been hearing an abundance of caution for months. And many analysts have back tracked and diverted and even doubled down. You get the feeling that patience is starting to run out.
This exhaustion of doomsday predictions is something to pay attention to. Let me give you two important reasons.
The S&P IS finding support at the 10 day moving average. It may be hugging it closely, but the support is there. As unsettling as it may be to stay long in these situations, you can’t deny the trend. Fighting the trend and shifting too early can be costly and many have been handing back gains as they try to jump ahead of a confirmed reversal. Trends will send clear signals that show when they are exhausted.
The second thing to be careful of is to not let your guard down. While we do have to follow the trend, we have to be ready when it reverses. A great strategy in this type of situation is to stop trying to call the market and just listen to it.
Traders who have been trying to go short just ahead of the next correction or reversal have been taking a hefty haircut. Better to let the trend play out, maybe even get a trim when the rally arcs and starts to turn then to keep giving money to Wall Street as it pushes this market up.
Momentum indicators are really powerful tools that help confirm the trend will keep going or let you know that exhaustion has truly happened and it is time to shift.
Momentum Trading with Precision shows some of the most powerful examples of these indicators. Grab it here and make sure you are ready as things shift.
Keep learning and trade wisely,
Market Wealth Daily