End Of Bull Market
68% of investors are either clueless (bears and neutrals) or in a state of panic and that bodes well for this long term bull market. This bull market is probably going to set records for years to come. In some aspects, one could argue that this bull market is in its infancy as the masses have ignored it from its onset.
It is possible that this bull could last another 6-9 years, but don’t fixate on these numbers. We were one of the first to state that the Dow could trade to 30K and that was when the Dow was trading well below 20K. When 30K is taken out, we will re-evaluate the situation. If this bull lasts another six years, then Dow 55K is a possibility. However, let’s focus on the now, for the past is gone, and the future is yet to come. But by focussing on the present you have the chance to shape both the past and the future.
This trade war and Brexit will one day be viewed as incredible opportunities, but, right now, the naysayers and the herd only seems to focus on the fear factor. These individuals are doomed to repeat the mistakes of yesteryear, for they learn nothing. Another term for this disorder is insanity; doing the same rubbish and hoping for a new outcome. Well, thank goodness the masses never learn, for it provides Tactical investors with even more opportunities. Market Update Aug 31, 2019
For now, the “end of bull market” argument is at best rubbish, as the trend of the market is firmly bullish and no bull market has ever ended on a note of fear.
One can break free from this disorder and free one’s kids in the process too. The best education one can impart to their children is to inform them that 90% of what they learn in school/college is useless and 99% of what they see and read from Mass Media outlets should be viewed in the same light as sewage. Then teach them this simple lesson. Embrace stock market crashes with gusto.
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Another interesting development is that for the most part of 2019, bullish sentiment has traded well below the historical average of 39. Now let this sink in, we are in one of the longest bull markets in history, and instead of soaring to the moon, bullish sentiment is trading well below its historical average. Contrast this to the sentiment in bitcoin; currently, the sentiment is close to the euphoric stage, and this latest Bull Run is only two months in the making
Looking at the chart below, it would be easy to conclude that we are about to push the “triple top” theory, but we are not. We are looking at the picture in terms of very strong resistance and very strong support zones. The Dow has tried to trade above 26,800-27,000 ranges almost 19 months. Furthermore, these attacks have been widely spaced out. Hence, the Dow is now at an inflexion point”; it either blasts above 27,000 and in doing so former resistance turns into a zone of strong support
End of bull market argument is faulty at best
This outlook is based on the short to intermediate timelines; the long term picture is still bullish. We are not worried about a sharp or medium pullback for the only thing that changes is the opportunity factor. When the trend is up, strong deviations are viewed through a very bullish lens; in other words, the strong the deviation, the better the opportunity factor.
If the above comes to pass, it will be a good time to test your resolve for it is easy to buy when the situation appears to be calm, but when it’s not most panic and run instead of embracing the opportunity. It’s amazing how when a market is soaring everyone wants to get in and pay more and more, but the same individuals that were willing to pay more are now afraid to pay less for the same stock.