Best of the Week
Most Popular
1. Next Financial Crisis Is Already Here! John Lewis 99% Profits CRASH - Retail Sector Collapse - Nadeem_Walayat
2.Why Is Apple Giving This Tiny Stock A $900 Million Opportunity? - James Burgess
3.Gold Price Trend Analysis - - Nadeem_Walayatt
4.The Beginning of the End of the Dollar - Richard_Mills
5.Stock Market Trend Forecast Update - - Nadeem_Walayat
6.Hindenburg Omen & Consumer Confidence: More Signs of Stock Market Trouble in 2019 - Troy_Bombardia
7.Precious Metals Sector: It’s 2013 All Over Again - P_Radomski_CFA
8.Central Banks Have Gone Rogue, Putting Us All at Risk - Ellen_Brown
9.Gold Stocks Forced Capitulation - Zeal_LLC
10.The Post Bubble Market Contraction Thesis Receives Validation - Plunger
Last 7 days
Silver's Time Is Coming - 17th Oct 18
Stock Market Volatility Breeds Contempt - 17th Oct 18
Gold 7-Year Bear Market Phase Is Over - 17th Oct 18
Gold - A Golden Escape - 17th Oct 18
Tec Stocks Sector Set For A Rebound? - 16th Oct 18
Real Estate Transactions are Becoming Seamless with Blockchain-Powered Data Sets - 16th Oct 18
Important Elements of a Viral Landing Page - 16th Oct 18
Stephen Leeb Predicts 3-Digit Silver and 5 Digit Gold?! - 16th Oct 18
BREXIT, Italy’s Deficit, The EU Summit And Fomcs Minutes In Focus - 16th Oct 18
Is this the Start of a Bear Market for Stocks? - 16th Oct 18
Chinese Economic Prospects Amid US Trade Wars - 16th Oct 18
2019’s Hottest Commodity Is About To Explode - 15th Oct 18
Keep A Proper Perspective About Stock Market Recent Move - 15th Oct 18
Is the Stocks Bull Dead? - 15th Oct 18
Stock Market Bottoms are a Process - 15th Oct 18
Fed is Doing More Than Just Raising Rates - 14th Oct 18
Stock Markets Last Cheap Sector - Gold - 14th Oct 18
Next Points for Crude Oil Bears - 13th Oct 18
Stock Market Crash: Time to Buy Stocks? - 12th Oct 18
Sheffield Best Secondary School Clusters for 2018-19 Place Applications - 12th Oct 18
Trump’s Tariffs Echo US Trade Policy That Led to the Great Depression - 12th Oct 18
US Dollar Engulfing Bearish Pattern Warns Of Dollar Weakness - 12th Oct 18
Stock Market Storm Crash, Dow Plunges to Trend Forecast! - 12th Oct 18
SP500 Stock Market Sell Off Well Forecast by President Trump - 11th Oct 18
USD and US Tr. Yields Retreat, GBP Gains on Brexit-deal Report - 11th Oct 18
Loss Of Yield Curve "Shock Absorber" Could Mean A Rough Ride Ahead For Markets & Housing - 11th Oct 18
Just How Bearish is the Stock Market’s Breadth? - 11th Oct 18
Here’s Why Gold Stocks, Gold, and Silver Are Great Buys Now - 10th Oct 18
Russian Ruble Technical Chart Analysis and Forecast - 10th Oct 18
Society Trends To Keep in Mind in the USA - 10th Oct 18
[eBook] How to Identify Turning Points in the Market - 10th Oct 18

Market Oracle FREE Newsletter

Trading Any Market

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

© 2005-2018 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

6 Critical Money Making Rules